Philippine National Bank - Audited Financial Statements - 31dec2022 - PSE

Office of the SVP and Acting Financial Officer
Trunk Lines: 8526-3131 to 70/8891-6040 to 70

Local: 4475
March 15, 2023
MS. ALEXANDRA D. TOM WONG

Officer-in-Charge, Disclosure Department
Philippine Stock Exchange
6/F PSE Tower
28th Street corner 5th Avenue
BGC, Taguig City
ATTY. MARIE ROSE M. MAGALLEN-LIRIO

Head, Issuer Compliance and Disclosure Department
Philippine Dealing & Exchange Corporation
29/F, BDO Equitable Tower
8751 Paseo de Roxas, Makati City
Dear Mesdames:
We submit a copy of the Audited Financial Statements of Philippine National Bank and
Subsidiaries as of December 31, 2022 and 2021 and for the years ended
December 31, 2022, 2021 and 2020.
Very truly yours,
AIDELL AMOR R. GREGORIO

Senior Vice President &
Acting Chief Financial Officer
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-C
CURRENT REPORT UNDER SECTION 17

OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER
1. March 15, 2023

Date of Report (Date of earliest event reported)
2. SEC Identification Number ASO96-005555 3. BIR Tax Identification No. 000-188-209-000
4. PHILIPPINE NATIONAL BANK

Exact name of registrant as specified in its charter
5. PHILIPPINES 6. (SEC Use Only)
Province, country or other jurisdiction of Industry Classification Code:

incorporation
7. PNB Financial Center, Pres. Diosdado Macapagal Blvd., Pasay City, Metro Manila
1300
Address of principal office
Postal Code
8. (632)/ 8526-3131 to 70/ (632) 8891-6040 to 70
Issuer’s telephone number, including area code
9. Not Applicable
Former name or former address, if changed since last report
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the
RSA
Title of Each Class Number of Shares of Common Stock

Outstanding and Amount of Debt Outstanding
Common Shares 1,525,764,850
11. Indicate the item numbers reported herein: Item 9
Attached is a copy of the Audited Financial Statements of Philippine National Bank and
Subsidiaries as of December 31, 2022 and 2021 and for the years ended
December 31, 2022, 2021 and 2020.
COVER SHEET
for
AUDITED FINANCIAL STATEMENTS
SEC Registration Number
A S 0 9 6 - 0 0 5 5 5 5
COMPANY NAME
P H I L I P P I N E N A T I O N A L B A N K A N D S
U B S I D I A R I E S
PRINCIPAL OFFICE( No. / Street / Barangay / City / Town / Province )
P N B F i n a n c i a l C e n t e r , P r e s i d e n
t D i o s d a d o M a c a p a g a l B o u l e v a r d
, P a s a y C i t y
Form Type Department requiring the report Secondary License Type, If Applicable
A A F S
COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number Mobile Number
gregorioar@pnb.com.ph
No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)
36,192 04/25 12/31
CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number
Mr. Aidell Amor R. Gregorio 891-6040 to 70
CONTACT PERSON’s ADDRESS
NOTE 1 : In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within
thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
2 : All Boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission
and/or non-receipt of Notice of Deficiencies. Further, non-receipt of Notice of Deficiencies shall not excuse the corporation from liability for its deficiencies.
*SGVFS169731*
SyCip Gorres Velayo & Co. Tel: (632) 8891 0307
6760 Ayala Avenue Fax: (632) 8819 0872
1226 Makati City ey.com/ph
Philippines
INDEPENDENT AUDITOR’S REPORT
The Stockholders and the Board of Directors

Philippine National Bank
PNB Financial Center
President Diosdado Macapagal Boulevard
Pasay City
Report on the Consolidated and Parent Company Financial Statements
Opinion
We have audited the consolidated financial statements of Philippine National Bank and its Subsidiaries
(the Group) and the parent company financial statements of Philippine National Bank (the Parent
Company), which comprise the consolidated and parent company statements of financial position as at
December 31, 2022 and 2021 and the consolidated and parent company statements of income,
consolidated and parent company statements of comprehensive income, consolidated and parent company
statements of changes in equity and consolidated and parent company statements of cash flows for each
of the three years in the period ended December 31, 2022, and notes to the consolidated and parent
company financial statements, including a summary of significant accounting policies and other
explanatory information.
In our opinion, the accompanying consolidated and parent company financial statements present fairly, in
all material respects, the financial position of the Group and the Parent Company as at
December 31, 2022 and 2021, and their financial performance and their cash flows for each of the three
years in the period ended December 31, 2022 in accordance with Philippine Financial Reporting
Standards (PFRSs).
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated and Parent Company Financial Statements section of our report. We are independent
of the Group and the Parent Company in accordance with the Code of Ethics for Professional
Accountants in the Philippines (the Code of Ethics) together with the ethical requirements that are
relevant to our audit of the consolidated and parent company financial statements in the Philippines, and
we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of
Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
*SGVFS169731*
A member firm of Ernst & Young Global Limited
-2-
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated and parent company financial statements of the current period. These matters
were addressed in the context of our audit of the consolidated and parent company financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities detailed in the Auditor’s Responsibilities for the Audit of the
Consolidated and Parent Company Financial Statements section of our report, including in relation to
these matters. Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the consolidated and parent company financial
statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying consolidated and parent
company financial statements.
Applicable to the audit of the consolidated and parent company financial statements
Adequacy of Allowance for Credit Losses on Loans and Receivables

The Group and the Parent Company’s application of the expected credit losses (ECL) model in
calculating the allowance for credit losses on loans and receivables is significant to our audit as it
involves the exercise of significant management judgment. Key areas of judgment include: segmenting
the Group’s and the Parent Company’s credit risk exposures; determining the method to estimate ECL;
defining default; identifying exposures with significant deterioration in credit quality; determining
assumptions to be used in the ECL model such as the counterparty credit risk rating, the expected life of
the financial asset, expected recoveries from defaulted accounts, and impact of any financial support and
credit enhancements extended by any party; and incorporating forward-looking information in calculating
ECL.
Allowance for credit losses on loans and receivables as of December 31, 2022 amounted to = P38.9 billion
and P
=39.4 billion for the Group and the Parent Company, respectively. Provision for credit losses in 2022
amounted to =P7.2 billion and P
=7.2 billion for the Group and the Parent Company, respectively.
The disclosures related to the allowance for credit losses on loans and receivables are included in Note 16
of the financial statements.
Audit response
We obtained an understanding of the board approved methodologies and models used for the Group’s and
the Parent Company’s different credit exposures and assessed whether these considered the requirements
of PFRS 9, Financial Instruments, to reflect an unbiased and probability-weighted outcome, and to
consider time value of money and the best available forward-looking information.
We (a) assessed the Group’s and the Parent Company’s segmentation of its credit risk exposures based on
homogeneity of credit risk characteristics; (b) tested the definition of default and significant increase in
credit risk criteria against historical analysis of accounts, credit risk management policies and practices in
place; (c) tested the Group’s and the Parent Company’s application of internal credit risk rating system by
reviewing the ratings of sample credit exposures; (d) assessed whether expected life is different from the
contractual life by testing the maturity dates reflected in the Group’s and the Parent Company’s records
*SGVFS169731*
-3-
and considering management’s assumptions regarding future collections, advances, extensions, renewals
and modifications; (e) tested loss given default by inspecting historical recoveries and related costs,
write-offs and collateral valuations, and the effects of any financial support and credit enhancements
provided by any party; (f) tested exposure at default considering outstanding commitments and repayment
scheme; (g) evaluated the forward-looking information used for overlay through corroboration of publicly
available information and our understanding of the Group’s and the Parent Company’s lending portfolios
and broader industry knowledge; and (h) tested the effective interest rate used in discounting the expected
loss.
Further, we compared the data used in the ECL models by reconciling data from source system reports to
the data warehouse and from the data warehouse to the loss allowance analysis/models and financial
reporting systems. To the extent that the loss allowance analysis is based on credit exposures that have
been disaggregated into subsets of debt financial assets with similar risk characteristics, we traced or re-
performed the disaggregation from source systems to the loss allowance analysis. We also assessed the
assumptions used where there are missing or insufficient data.
We recalculated impairment provisions on a sample basis. We involved our internal specialist in the
performance of the above procedures.
We reviewed the completeness of the disclosures made in the financial statements.
Impairment Testing of Goodwill

As of December 31, 2022, the goodwill of the Group and the Parent Company amounted to = P11.2 billion
and P
=11.4 billion, respectively, as a result of the acquisition of Allied Banking Corporation in 2013. Under
PFRS, the Group and the Parent Company are required to test the amount of goodwill for impairment
annually. Goodwill has been allocated to three cash generating units (CGUs) namely Retail Banking,
Corporate Banking, and Global Banking and Market. The Group and the Parent Company performed the
impairment testing using the value in use calculation. The annual impairment test is significant to our audit
because it involves significant judgment and is based on assumptions which are subject to higher level of
estimation uncertainty, specifically estimates of loan and deposit growth rates, interest margin, discount
rates, and long-term growth rate.
The disclosures related to goodwill impairment are included in Note 14 to the financial statements.
Audit response
We involved our internal specialist in evaluating the methodology and the assumptions used by the Group
and the Parent Company. We compared the key assumptions used, such as loan and deposit growth rates,
interest margin and long-term growth rate to the historical performance of the CGUs and to economic and
industry forecasts. We tested the parameters used in the derivation of the discount rate against market
data. We also reviewed the disclosures about those assumptions to which the outcome of the impairment
test is most sensitive; specifically those that have the most significant effect on the determination of the
recoverable amount of goodwill.
Recognition of Deferred Tax Assets

As of December 31, 2022, the deferred tax assets of the Group and the Parent Company amounted to
=6.5 billion and =
P P6.6 billion, respectively. The recognition of deferred tax assets is significant to our
audit because the assessment process is complex and judgmental and is based on assumptions that are
affected by expected future market or economic conditions and the expected performance of the Group
and the Parent Company.
*SGVFS169731*
-4-
The disclosures in relation to deferred income taxes are included in Note 30 to the financial statements.
Audit Response
We evaluated the management’s assessment on the availability of future taxable income in reference to
financial forecast and tax strategies. We evaluated management’s forecast by comparing the loan
portfolio and deposit growth rates to the historical performance of the Group and the Parent Company and
the industry, including future market circumstances. We also assessed the timing of the reversal of future
taxable and deductible temporary differences.
Other Information
Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report
for the year ended December 31, 2022, but does not include the consolidated and parent company
financial statements and our auditor’s report thereon. The SEC Form 20-IS (Definitive Information
Statement) SEC Form 17-A and Annual Report for the year ended December 31, 2022 are expected to be
made available to us after the date of this auditor's report.
Our opinion on the consolidated and parent company financial statements does not cover the other
information and we will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated and parent company financial statements, our
responsibility is to read the other information identified above when it becomes available and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Consolidated and
Parent Company Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated and parent
company financial statements in accordance with PFRSs, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the consolidated and parent company financial statements, management is responsible for
assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Group and the Parent Company or to cease operations, or has
no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s and the Parent Company’s
financial reporting process.
*SGVFS169731*
-5-
Auditor’s Responsibilities for the Audit of the Consolidated and Parent Company Financial
Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and parent company
financial statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with PSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these financial statements.
As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Parent Company’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the consolidated and parent
company financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group and the Parent Company to cease to continue as a
going concern.
 Evaluate the overall presentation, structure and content of the consolidated and parent company
financial statements, including the disclosures, and whether the consolidated and parent company
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group and the Parent Company to express an opinion on the
consolidated and parent company financial statements. We are responsible for the direction,
supervision and performance of the audit. We remain solely responsible for our audit opinion.
*SGVFS169731*
-6-
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Supplementary Information Required Under Revenue Regulations 15-2010 and
Bangko Sentral ng Pilipinas Circular No. 1074
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken
as a whole. The supplementary information required under Revenue Regulations 15-2010 in Note 40 and
the Bangko Sentral ng Pilipinas Circular No. 1074 in Note 41 to the financial statements are presented for
purposes of filing with the Bureau of Internal Revenue and Bangko Sentral ng Pilipinas, respectively, and
is not a required part of the basic financial statements. Such information is the responsibility of the
management of Philippine National Bank. The information has been subjected to the auditing procedures
applied in our audit of the basic financial statements. In our opinion, the information is fairly stated, in all
material respects, in relation to the basic financial statements taken as a whole.
The engagement partner on the audit resulting in this independent auditor’s report is Vicky Lee-Salas.
SYCIP GORRES VELAYO & CO.
Vicky Lee-Salas
Partner
CPA Certificate No. 86838
Tax Identification No. 129-434-735
BOA/PRC Reg. No. 0001, August 25, 2021, valid until April 15, 2024
SEC Partner Accreditation No. 86838-SEC (Group A)
Valid to cover audit of 2021 to 2025 financial statements of SEC covered institutions
SEC Firm Accreditation No. 0001-SEC (Group A)
Valid to cover audit of 2021 to 2025 financial statements of SEC covered institutions
BIR Accreditation No. 08-001998-053-2020, November 27, 2020, valid until November 26, 2023
PTR No. 9564639, January 3, 2023, Makati City
March 13, 2023
*SGVFS169731*
PHILIPPINE NATIONAL BANK AND SUBSIDIARIES
STATEMENTS OF FINANCIAL POSITION
(In Thousands)
Consolidated Parent Company

December 31 December 31
2022 2021 2022 2021
ASSETS
Cash and Other Cash Items P
= 22,217,915 =27,552,773
P P
= 22,103,095 =27,454,459
P
Due from Bangko Sentral ng Pilipinas (Notes 7 and 17) 94,701,360 161,001,912 94,701,360 161,001,912
Due from Other Banks (Note 33) 26,010,183 27,222,083 17,599,374 19,324,000
Interbank Loans Receivable (Notes 8 and 33) 16,290,101 32,106,088 14,734,743 30,295,755
Securities Held Under Agreements to Resell (Notes 8 and 35) 64,523,863 15,796,673 64,523,863 15,796,673
Financial Assets at Fair Value Through Profit or Loss
(FVTPL) (Note 9) 7,347,201 11,167,657 7,195,685 11,010,278
Financial Assets at Fair Value Through Other
Comprehensive Income (FVOCI) (Note 9) 158,183,525 167,987,290 157,205,907 167,546,350
Investment Securities at Amortized Cost (Note 9) 110,467,960 89,455,843 110,328,678 89,327,894
Loans and Receivables (Notes 10 and 33) 593,099,915 606,953,751 577,995,018 592,498,761
Property and Equipment (Note 11) 11,973,547 13,472,320 10,619,033 11,812,991
Investments in Subsidiaries and an Associate (Note 12) 2,688,764 2,468,107 20,384,104 27,275,451
Investment Properties (Note 13) 13,794,986 10,735,896 13,264,820 10,178,327
Deferred Tax Assets (Note 30) 6,616,902 6,405,505 6,574,190 6,271,578
Intangible Assets (Note 14) 1,863,922 2,429,434 1,753,616 2,328,957
Goodwill (Note 14) 11,221,410 11,221,410 11,361,768 11,361,768
Other Assets (Note 15) 4,155,522 4,807,920 3,398,996 4,525,498
TOTAL ASSETS P
= 1,145,157,076 P=1,190,784,662 P= 1,133,744,250 P=1,188,010,652
LIABILITIES AND EQUITY

LIABILITIES
Deposit Liabilities (Notes 17 and 33)
Demand P
= 220,043,866 =216,367,830
P P
= 219,805,641 =216,040,593
P
Savings 519,940,535 498,581,535 518,928,640 497,172,862
Time 112,113,308 151,729,554 108,766,087 158,066,350
Long Term Negotiable Certificates 19,130,012 28,245,390 19,130,012 28,245,390
871,227,721 894,924,309 866,630,380 899,525,195
Financial Liabilities at FVTPL (Notes 18, 23 and 35) 1,039,776 891,531 1,039,776 891,346
Bills and Acceptances Payable (Notes 19, 33 and 35) 14,980,373 52,953,797 13,888,035 51,113,018
Lease Liabilities (Notes 29 and 33) 3,636,391 3,765,391 3,604,077 3,698,410
Accrued Taxes, Interest and Other Expenses (Note 20) 9,117,393 7,765,650 8,487,700 7,504,381
Bonds Payable (Note 21) 58,439,097 53,383,421 58,439,097 53,383,421
Income Tax Payable 983,051 157,735 916,235 89,328
Other Liabilities (Note 22) 15,827,640 15,719,872 14,093,805 13,512,851
975,251,442 1,029,561,706 967,099,105 1,029,717,950
EQUITY ATTRIBUTABLE TO EQUITY
HOLDERS OF THE PARENT COMPANY
Capital Stock (Note 25) 61,030,594 61,030,594 61,030,594 61,030,594
Capital Paid in Excess of Par Value (Note 25) 32,116,560 32,116,560 32,106,560 32,106,560
Surplus Reserves (Notes 10, 25 and 32) 4,929,242 5,147,440 4,929,242 5,147,440
Surplus (Note 25) 73,748,748 61,998,232 73,919,909 62,169,393
Net Unrealized Losses on Financial Assets at FVOCI
(Notes 9 and 33) (5,959,275) (703,737) (5,959,275) (703,737)
Remeasurement Losses on Retirement Plan (Note 28) (2,222,945) (2,725,067) (2,222,945) (2,725,067)
Accumulated Translation Adjustment (Note 25) 2,314,447 1,503,396 2,314,447 1,503,396
Other Equity Reserves (Notes 12 and 25) 248,830 248,830 390,517 390,517
Share in Aggregate Reserves (Losses) on Life Insurance
Policies (Note 12) 136,096 (626,394) 136,096 (626,394)
Other Equity Adjustment 13,959 13,959 – –
166,356,256 158,003,813 166,645,145 158,292,702
NON-CONTROLLING INTERESTS (Note 12) 3,549,378 3,219,143 – –
169,905,634 161,222,956 166,645,145 158,292,702
TOTAL LIABILITIES AND EQUITY P
= 1,145,157,076 P
=1,190,784,662 P= 1,133,744,250 P
=1,188,010,652
See accompanying Notes to Financial Statements.
*SGVFS169731*
STATEMENTS OF INCOME
(In Thousands, Except Earnings per Share)

Years Ended December 31
2022 2021 2020 2022 2021 2020
INTEREST INCOME ON
Loans and receivables (Notes 10, 27 and 33) = 34,424,531
P =34,157,780 P
P =37,352,374 = 33,794,036
P =33,449,961
P =
P37,067,285
Investment securities at amortized cost and FVOCI
(Note 9) 8,154,922 5,963,594 6,203,975 8,143,092 5,962,614 6,155,803
Deposits with banks and others (Notes 7, 12 and 33) 1,417,661 1,248,155 2,192,045 1,330,052 1,219,996 1,173,981
Financial assets at FVTPL (Note 9) 292,685 632,492 665,751 284,251 565,447 542,512
Interbank loans receivable and securities held under
agreements to resell (Note 8) 954,603 400,356 536,304 896,683 348,153 478,508
45,244,402 42,402,377 46,950,449 44,448,114 41,546,171 45,418,089
INTEREST EXPENSE ON
Deposit liabilities (Notes 17 and 33) 5,371,667 4,813,766 7,379,018 5,383,153 4,885,785 7,227,056
Bonds payable (Note 21) 2,111,192 2,231,863 2,904,528 2,111,192 2,231,863 2,904,528
Bills payable and other borrowings (Notes 19, 29 and 33) 433,973 511,921 846,440 363,544 425,080 637,478
7,916,832 7,557,550 11,129,986 7,857,889 7,542,728 10,769,062
NET INTEREST INCOME 37,327,570 34,844,827 35,820,463 36,590,225 34,003,443 34,649,027
Service fees and commission income (Notes 26 and 33) 6,997,609 6,340,326 4,684,572 5,563,369 5,310,729 4,134,519
Service fees and commission expense 1,429,195 1,051,376 983,186 935,945 846,165 858,182
NET SERVICE FEES AND COMMISSION INCOME 5,568,414 5,288,950 3,701,386 4,627,424 4,464,564 3,276,337
OTHER OPERATING INCOME
Net gains on sale or exchange of assets (Note 26) 7,775,154 981,462 195,842 7,770,001 974,024 130,493
Foreign exchange gains - net (Note 23) 1,608,281 743,549 919,555 1,149,444 623,493 929,890
Trading and investment securities gains (losses) - net
(Notes 9 and 33) (1,280,783) 731,572 3,337,589 (1,277,759) 600,580 3,456,521
Equity in net earnings (losses) of subsidiaries and an
associate (Note 12) (56,060) 50,789 88,476 747,341 (650,134) 95,939
Miscellaneous (Note 27) 1,136,692 1,070,047 1,244,699 721,433 759,826 906,752
TOTAL OTHER OPERATING INCOME 9,183,284 3,577,419 5,786,161 9,110,460 2,307,789 5,519,595
TOTAL OPERATING INCOME 52,079,268 43,711,196 45,308,010 50,328,109 40,775,796 43,444,959
PROVISION FOR IMPAIRMENT, CREDIT AND
OTHER LOSSES (Notes 14 and 16) 7,198,117 12,879,011 16,882,621 7,305,653 13,125,737 16,534,335
OPERATING EXPENSES
Compensation and fringe benefits (Notes 25, 28 and 33) 9,762,776 9,985,822 10,167,173 9,012,641 9,274,801 9,313,371
Taxes and licenses (Note 30) 5,225,595 3,988,371 4,551,142 5,120,690 3,903,066 4,394,703
Depreciation and amortization (Note 11) 4,225,746 2,845,717 3,154,568 3,909,420 2,499,071 2,607,269
Occupancy and equipment-related costs (Note 29) 1,099,876 1,124,166 990,650 952,932 1,002,093 942,896
Miscellaneous (Note 27) 8,051,942 8,202,755 9,013,439 7,810,430 7,974,555 8,637,974
TOTAL OPERATING EXPENSES 28,365,935 26,146,831 27,876,972 26,806,113 24,653,586 25,896,213
OTHER INCOME
Gain on loss of control of subsidiaries - net (Note 12) – 16,807,275 – – 16,916,842 –
Gain on remeasurement of retained interest (Note 12) – 16,477,968 – – 16,383,008 –
TOTAL OTHER INCOME – 33,285,243 – – 33,299,850 –
INCOME BEFORE INCOME TAX 16,515,216 37,970,597 548,417 16,216,343 36,296,323 1,014,411
PROVISION FOR (BENEFIT FROM) INCOME TAX
(Note 30) 4,931,228 5,545,194 (1,866,402) 4,684,025 5,012,561 (1,945,521)
NET INCOME FROM CONTINUING OPERATIONS 11,583,988 32,425,403 2,414,819 11,532,318 31,283,762 2,959,932
NET INCOME (LOSS) FROM DISCONTINUED
OPERATIONS, NET OF TAX (Notes 12 and 36) – (735,365) 210,669 – – –
NET INCOME = 11,583,988
P =31,690,038
P =2,625,488
P = 11,532,318
P =31,283,762
P P
=2,959,932
ATTRIBUTABLE TO:
Equity Holders of the Parent Company (Note 31) = 11,532,318
P =31,630,626
P =2,614,653
P
Non-controlling Interests 51,670 59,412 10,835
= 11,583,988
P =31,690,038
P =2,625,488
P
Basic/Diluted Earnings Per Share Attributable to
Equity Holders of the Parent Company (Note 31) = 7.56
P =
P20.73 =1.71
P
Basic/Diluted Earnings Per Share Attributable to
Equity Holders of the Parent Company from
Continuing Operations (Note 31) = 7.56
P =21.21
P =1.58
P
*SGVFS169731*
STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)

2022 2021 2020 2022 2021 2020
NET INCOME = 11,583,988

P =31,690,038
P =2,625,488
P = 11,532,318
P =31,283,762
P =2,959,932
P
OTHER COMPREHENSIVE INCOME (LOSS)

Items that recycle to profit or loss in subsequent
periods:
Net change in unrealized loss on debt securities at
FVOCI, net of tax (Note 9) (4,764,711) (3,178,301) (578,919) (4,754,670) (3,158,391) (639,403)
Share in changes in net unrealized gains (losses) on
financial assets at FVOCI of subsidiaries
and an associate (Notes 9 and 12) (885,481) (558,030) 662,951 (902,788) (663,471) 556,246
(5,650,192) (3,736,331) 84,032 (5,657,458) (3,821,862) (83,157)
Accumulated translation adjustment 1,102,022 1,008,640 (257,238) 421,609 (117,264) (81,646)
Share in changes in accumulated translation
adjustment of subsidiaries and an associate
(Note 12) − − − 389,442 902,788 (148,044)
(4,548,170) (2,727,691) (173,206) (4,846,407) (3,036,338) (312,847)
Items that do not recycle to profit or loss in
subsequent
periods:
Share in changes in aggregate reserves (losses) on
life insurance policies (Note 12) 762,490 412,444 (1,051,118) 762,490 412,444 (1,051,118)
Remeasurement gains (losses) on retirement
plan (Note 28) 495,353 285,632 (725,968) 489,953 500,862 (710,795)
Share in changes in remeasurement gains (losses)
of subsidiaries and an associate (Note 12) 7,708 (1,482) 4,632 12,169 (216,477) (10,030)
Net change in unrealized gain (loss) on equity
securities at FVOCI (Note 9) 394,654 (21,809) (251,071) 401,920 63,722 (83,882)
1,660,205 674,785 (2,023,525) 1,666,532 760,551 (1,855,825)
OTHER COMPREHENSIVE LOSS,

NET OF TAX (2,887,965) (2,052,906) (2,196,731) (3,179,875) (2,275,787) (2,168,672)
TOTAL COMPREHENSIVE INCOME = 8,696,023

P =29,637,132
P =428,757
P = 8,352,443
P =29,007,975
P =791,260
P
ATTRIBUTABLE TO:
Equity holders of the Parent Company = 8,352,443
P =29,354,839
P =445,981
P
Non-controlling interests 343,580 282,293 (17,224)
= 8,696,023
P =29,637,132
P =428,757
P
*SGVFS169731*
STATEMENTS OF CHANGES IN EQUITY
(In Thousands)
Consolidated
Equity Attributable to Equity Holders of the Parent Company
Net
Unrealized Share in Reserves
Gains Aggregate of a Disposal
(Losses) Reserves Group
on Financial Remeasurement (Losses) Classified as
Capital Paid Surplus Assets at Losses on Accumulated Other Equity on Life Held Non-
in Excess Reserves FVOCI Retirement Translation Reserves Insurance for Sale controlling
Capital Stock of Par Value (Notes 10, 25 Surplus (Notes 9 and Plan Adjustment (Notes 12 Policies (Notes 12 Other Equity Interests Total
(Note 25) (Note 25) and 32) (Note 25) 33) (Note 28) (Note 25) and 25) (Note 12) and 36) Adjustment Total (Note 12) Equity
Balance at January 1, 2022 P
=61,030,594 P
=32,116,560 P
=5,147,440 P
=61,998,232 (P
=703,737) (P
=2,725,067) P
=1,503,396 P
=248,830 (P
=626,394) P
=− P
=13,959 P
=158,003,813 P
=3,219,143 P
=161,222,956
Total comprehensive income (loss) for the year – – – 11,532,318 (5,255,538) 502,122 811,051 – 762,490 – – 8,352,443 343,580 8,696,023
Transfer to surplus reserves (Notes 25 and 32) – – (218,198) 218,198 – – – – – – – – – –
Declaration of dividends by subsidiaries to
non-controlling interests – – – – – – – – – – – – (13,345) (13,345)
Balance at December 31, 2022 P
=61,030,594 P
=32,116,560 P
=4,929,242 P
=73,748,748 (P
=5,959,275) (P
=2,222,945) P
=2,314,447 P
=248,830 P
=136,096 P
=− P
=13,959 P
=166,356,256 P
=3,549,378 P
=169,905,634
Balance at January 1, 2021 =61,030,594

P =32,116,560
P =5,032,097
P P54,498,066
= P3,054,403
= (P
=3,009,452) P717,872
= =277,855
P (P
=1,038,838) =88,616
P =13,959
P =152,781,732
P =3,201,276
P =155,983,008
P
Total comprehensive income (loss) for the year – – – 31,630,626 (3,758,140) 284,385 785,524 – 412,444 – – 29,354,839 282,293 29,637,132
Declaration of property dividends (Note 12) – – – (23,935,371) – – – – – – – (23,935,371) – (23,935,371)
Transfer to surplus reserves (Notes 25 and 32) – – 115,343 (115,343) – – – – – – – – – –
Sale of interest in a subsidiary (Note 12) – – – (79,746) – – – – – (88,616) – (168,362) (259,721) (428,083)
Settlement of share-based payments (Note 25) – – – – – – – (29,025) – – – (29,025) – (29,025)
Balance at December 31, 2021 =61,030,594
P P
=32,116,560 =5,147,440
P P
=61,998,232 (P
=703,737) (P
=2,725,067) =1,503,396
P =248,830
P (P
=626,394) =−
P =13,959
P P
=158,003,813 =3,219,143
P =
P161,222,956

P =32,116,560
P =642,018
P =56,273,492
P =3,250,651
P (P
=2,229,220) P947,562
= =35,466
P =12,280
P =−
P =13,959
P =152,093,362
P =2,882,038
P =154,975,400
P
Total comprehensive income (loss) for the year – – – 2,614,653 (167,039) (720,825) (229,690) – (1,051,118) – – 445,981 (17,224) 428,757
Transfer to surplus reserves (Notes 25 and 32) – – 4,390,079 (4,390,079) – – – – – – – – – –
Sale of interest in a subsidiary (Note 12) – – – – – – – 248,830 – – – 248,830 95,900 344,730
Settlement of share-based payments (Note 25) – – – – – – – (6,441) – – – (6,441) – (6,441)
Reserves of disposal group classified as
held for sale (Note 36) – – – – (29,209) (59,407) – – – 88,616 – – 259,722 259,722
P =32,116,560
P =5,032,097
P =54,498,066
P =3,054,403
P (P
=3,009,452) =717,872
P =277,855
P (P
=1,038,838) =88,616
P =13,959
P =152,781,732
P =3,201,276
P =155,983,008
P
*SGVFS169731*
-2-
Parent Company
Share in
Net Unrealized Aggregate Reserves
Gains (Losses) Remeasurement Reserves of a Disposal
Capital Paid Surplus on Financial Losses on Accumulated Other Equity on Life Group Held
in Excess Reserves Assets at Retirement Translation Reserves Insurance for Sale
Capital Stock of Par Value (Notes 10, 25 Surplus FVOCI Plan Adjustment (Notes 12 Policies (Notes 12 Total
(Note 25) (Note 25) and 32) (Note 25) (Notes 9 and 33) (Note 28) (Note 25) and 25) (Note 12) and 36) Equity
Balance at January 1, 2022 = 61,030,594
P = 32,106,560
P = 5,147,440
P = 62,169,393
P (P
=703,737) (P
=2,725,067) = 1,503,396
P = 390,517
P (P
=626,394) =−
P = 158,292,702
P
Total comprehensive income (loss) for the year – – – 11,532,318 (5,255,538) 502,122 811,051 – 762,490 – 8,352,443
Transfer to surplus reserves (Notes 25 and 32) – – (218,198) 218,198 – – – – – – –
Balance at December 31, 2022 = 61,030,594
P = 32,106,560
P = 4,929,242
P = 73,919,909
P (P
=5,959,275) (P
=2,222,945) = 2,314,447
P = 390,517
P = 136,096
P =−
P = 166,645,145
P

P =32,106,560
P =5,032,097
P P54,843,588
= P3,054,403
= (P
=3,009,452) P717,872
= =419,542
P (P
=1,038,838) =88,616
P =153,244,982
P
Total comprehensive income (loss) for the year – – – 31,283,762 (3,758,140) 284,385 785,524 – 412,444 − 29,007,975
Declaration of property dividends (Note 12) – – – (23,935,371) – – – – − (23,935,371)
Transfer to surplus reserves (Notes 25 and 32) – – 115,343 (115,343) – – – – – − −
Sale of interest in a subsidiary (Note 12) – – – 92,757 – – – – – (88,616) 4,141
Settlement of share-based payments (Note 25) – – – – – – – (29,025) – − (29,025)
P =32,106,560
P =5,147,440
P =62,169,393
P (P
=703,737) (P
=2,725,067) =1,503,396
P =390,517
P (P
=626,394) =−
P =158,292,702
P

P =32,106,560
P =642,018
P =56,273,735
P =3,250,651
P (P
=2,229,220) P947,562
= =35,466
P =12,280
P P−
= =152,069,646
P
Total comprehensive income (loss) for the year – – – 2,959,932 (167,039) (720,825) (229,690) – (1,051,118) − 791,260
Transfer to surplus reserves (Notes 25 and 32) – – 4,390,079 (4,390,079) – – – – – − –
Business combination with a subsidiary (Note 12) – – – – – – – 390,517 – − 390,517
Settlement of share-based payments (Note 25) – – – – – – – (6,441) – − (6,441)
Reserves of disposal group classified as held for sale
(Note 36) – – – – (29,209) (59,407) – – – 88,616 −
P =32,106,560
P =5,032,097
P =54,843,588
P =3,054,403
P (P
=3,009,452) =717,872
P =419,542
P (P
=1,038,838) P88,616
= =153,244,982
P
*SGVFS169731*
STATEMENTS OF CASH FLOWS
(In Thousands)

2022 2021 2020 2022 2021 2020
CASH FLOWS FROM OPERATING

ACTIVITIES
Income before income tax from continuing operations = 16,515,216
P =37,970,597
P =548,417
P = 16,216,343
P =36,296,323
P =1,014,411
P
Income (loss) before income tax from discontinued
operations (Note 36) – (626,763) 299,251 – – –
Income before income tax 16,515,216 37,343,834 847,668 16,216,343 36,296,323 1,014,411
Adjustments for:
Net gains on sale or exchange of assets (Note 26) (7,775,154) (981,462) (195,842) (7,770,001) (974,024) (130,493)
Provision for impairment, credit and other losses
(Notes 14 and 16) 7,198,117 12,967,152 16,912,402 7,305,653 13,125,737 16,534,335
Unrealized foreign exchange losses (gains) on
bonds payable 4,979,818 3,113,544 (2,728,233) 4,979,818 3,113,544 (2,728,233)
Depreciation and amortization (Note 11) 4,225,746 2,894,759 3,184,141 3,909,420 2,499,071 2,607,269
Unrealized foreign exchange losses (gains) on bills
and acceptances payable 1,522,200 2,220,574 (1,059,619) 1,511,555 2,214,671 (1,059,379)
Net losses (gains) on financial assets at FVOCI
(Note 9) 1,069,547 (1,578,197) (2,455,265) 1,069,547 (1,578,197) (2,454,698)
Amortization of premium (discount) on investment
securities (935,770) 294,421 (182,716) (936,131) 296,554 (176,196)
Accretion to interest income of loss on loan
modifications (Note 27) (369,152) (351,502) (901,748) (369,152) (351,502) (901,748)
Net losses (gains) on financial assets at FVTPL
(Note 9) 211,235 846,625 (882,374) 208,212 977,617 (1,001,823)
Amortization of transaction costs on borrowings
(Notes 17 and 21) 105,480 116,898 229,420 105,480 116,898 229,420
Equity in net losses (earnings) of subsidiaries and
an associate (Note 12) 56,060 (50,789) (88,476) (747,341) 650,134 (95,939)
Gain on loss of control of subsidiaries - net
(Note 12) – (16,807,275) – – (16,916,842) –
Gain on remeasurement of retained interest
(Note 12) – (16,477,968) – – (16,383,008) –
Loss on loan modifications (Note 27) – – 1,587,605 – – 1,587,605
Changes in operating assets and liabilities:
Decrease (increase) in amounts of:
Interbank loan receivable (Note 8) (4,854,939) (891,301) 1,126,878 (4,656,651) (859,213) 1,134,547
Financial assets at FVTPL 3,609,221 11,812,813 (9,475,736) 3,606,381 9,959,744 (9,776,160)
Loans and receivables 4,448,687 (13,325,214) 36,534,525 4,995,515 (16,184,925) (16,207,664)
Other assets (243,157) 1,398,479 (896,061) (1,340,408) (368,189) (963,256)
Increase (decrease) in amounts of:
Financial liabilities at FVTPL 148,245 190,292 455,620 148,430 190,544 468,810
Deposit liabilities (23,726,210) 4,603,064 64,182,479 (32,924,438) 5,943,796 117,646,115
Accrued taxes, interest and other expenses 1,518,737 246,627 (2,376,061) 1,139,793 681,686 (1,903,084)
Other liabilities 616,446 (7,663,779) (5,509,215) 1,084,236 (1,511,065) (2,764,403)
Net cash generated from (used in) operations 8,320,373 19,921,595 98,309,392 (2,463,739) 20,939,354 101,059,436
Income taxes paid (2,050,109) (2,285,669) (1,648,621) (1,802,246) (1,841,579) (1,461,890)
Net cash provided by (used in) operating activities 6,270,264 17,635,926 96,660,771 (4,265,985) 19,097,775 99,597,546
CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from:
Disposal/maturities of financial assets at FVOCI 643,902,197 212,598,365 159,923,105 643,888,779 210,574,683 157,339,947
Maturities/early redemptions of investment
securities at amortized cost 141,160,199 39,790,071 61,359,649 141,171,532 39,085,249 61,359,649
Disposal of investment properties 6,844,641 293,738 210,936 6,842,374 214,782 161,736
Disposal of property and equipment 108,253 201,593 36,750 32,546 301,198 1,322
Disposal of investment in a subsidiary (Note 12) – 1,001,558 521,817 – 1,001,558 −
Return of investment (Note 12) – − − 7,500,000 − −
Cash dividends from a subsidiary (Note 12) – − − 1,092,000 − −
Acquisitions of:
Financial assets at FVOCI (638,254,305) (224,330,405) (169,859,472) (637,154,487) (224,330,405) (169,859,472)
Investment securities at amortized cost (162,392,791) (33,372,543) (56,875,400) (162,392,791) (33,372,543) (57,227,468)
Software cost (Note 14) (881,572) (655,455) (283,472) (848,426) (612,515) (268,768)
Property and equipment (Note 11) (547,083) (1,120,741) (1,231,247) (535,981) (675,730) (1,027,671)
Additional investments in an associate (Note 12) (392,000) (245,000) – (392,000) (245,000) −
Net cash used in investing activities (10,452,461) (5,838,819) (6,197,334) (796,454) (8,058,723) (9,520,725)
(Forward)
*SGVFS169731*
-2-

2022 2021 2020 2022 2021 2020
CASH FLOWS FROM FINANCING

ACTIVITIES
Settlement of bills and acceptances payable (P
= 277,002,294) (P
= 273,753,842) (P
= 136,717,622) (P
= 274,908,050) (P
= 272,556,037) (P
= 118,473,479)
Proceeds from issuances of bills and acceptances
payable 237,506,670 237,327,616 168,973,402 236,171,512 236,637,024 155,926,201
Payment of principal portion of lease liabilities
(Note 29) (1,113,225) (1,231,287) (664,156) (1,068,038) (1,213,912) (649,402)
Settlement of bonds payable – (13,870,000) − − (13,870,000) −
Net cash provided by (used in) financing activities (40,608,849) (51,527,513) 31,591,624 (39,804,576) (51,002,925) 36,803,320
NET INCREASE (DECREASE) IN CASH AND

CASH EQUIVALENTS (44,791,046) (39,730,406) 122,055,061 (44,867,015) (39,963,873) 126,880,141
CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR
Cash and other cash items 27,552,773 25,135,724 30,500,927 27,454,459 25,038,434 29,642,159
Due from Bangko Sentral ng Pilipinas 161,001,912 202,129,356 105,981,801 161,001,912 202,129,356 101,801,597
Due from other banks 27,222,083 19,733,300 17,758,143 19,324,000 12,131,726 10,835,106
Interbank loans receivable (Note 8) 30,453,378 38,939,572 22,943,529 29,042,376 37,464,504 22,274,306
Securities held under agreements to resell 15,796,673 15,819,273 2,517,764 15,796,673 15,819,273 1,149,984
262,026,819 301,757,225 179,702,164 252,619,420 292,583,293 165,703,152
CASH AND CASH EQUIVALENTS AT

END OF YEAR
Cash and other cash items 22,217,915 27,552,773 25,135,724 22,103,095 27,454,459 25,038,434
Due from Bangko Sentral ng Pilipinas 94,701,360 161,001,912 202,129,356 94,701,360 161,001,912 202,129,356
Interbank loans receivable (Note 8) 9,782,452 30,453,378 38,939,572 8,824,713 29,042,376 37,464,504
Securities held under agreements to resell 64,523,863 15,796,673 15,819,273 64,523,863 15,796,673 15,819,273
= 217,235,773 =
P P262,026,819 P
=301,757,225 = 207,752,405 =
P P252,619,420 P
=292,583,293
OPERATIONAL CASH FLOWS FROM

INTEREST AND DIVIDENDS
Interest paid P7,312,461
= P7,690,053
= =
P11,936,540 P7,256,130
= P7,670,243
= =
P11,494,829
Interest received 43,082,036 42,928,178 47,391,100 42,297,774 42,075,051 44,519,365
Dividends received – – – 1,092,000 – –
*SGVFS169731*
NOTES TO FINANCIAL STATEMENTS
(Amounts in Thousand Pesos except When Otherwise Indicated)
1. Corporate Information
Philippine National Bank (PNB or the Parent Company) is a universal bank established in the
Philippines in 1916. On June 21, 1989, PNB’s shares were listed with the Philippine Stock Exchange
(PSE). As of December 31, 2022 and 2021, the shares of PNB are held by the following:
2022 2021
LT Group, Inc. (LTG) (indirect ownership through its
various holding companies) 59.83% 59.83%
PCD Nominee Corporation * 15.85% 15.94%
Other stockholders owning less than 10% each 24.32% 24.23%
100.00% 100.00%
* Acts as a trustee-nominee for PNB shares lodged under the PCD system
PNB’s immediate parent company, LTG, and ultimate parent company, Tangent Holdings
Corporation, are also incorporated in the Philippines.
The Parent Company provides a full range of banking and other financial services, which include
deposit-taking, lending, bills discounting, trade finance, foreign exchange dealings, investment
banking, treasury operations, fund transfers, remittance and trust services, through its 651 and 670
domestic branches as of December 31, 2022 and 2021, respectively. As of the same dates, the Parent
Company has 72 and 70 overseas branches, representative offices, remittance centers and
subsidiaries, respectively, in 17 locations in Asia, North America and Europe.
The subsidiaries of the Parent Company are engaged in a number of diversified financial and related
businesses such as remittance, banking, leasing, stock brokerage, foreign exchange trading and/or
related services. The Parent Company and the subsidiaries are collectively referred hereinto as the
Group.
The principal place of business of the Parent Company is at PNB Financial Center, President
Diosdado Macapagal Boulevard, Pasay City, Metro Manila, Philippines.
2. Summary of Significant Accounting Policies
2.1 Basis of Preparation of the Financial Statements
The Group prepared the accompanying financial statements on a historical cost basis, except for the
following accounts which are measured at fair value:
 financial assets and liabilities at fair value through profit or loss (FVTPL); and
 financial assets at fair value through other comprehensive income (FVOCI).
The financial statements of the Parent Company which include its Head Office in Pasay City,
Philippines, and all of its domestic and foreign branches, reflect the accounts maintained in its
Regular Banking Unit (RBU) and Foreign Currency Deposit Unit (FCDU). The functional currency
of RBU and FCDU is Philippine pesos (P = or PHP) and United States Dollar (USD), respectively. The
individual financial statements of these units are combined and any inter-unit accounts and
transactions are eliminated.
*SGVFS169731*
-2-
The Group presents the amounts in the financial statements to the nearest thousand pesos (P
=000),
unless otherwise stated.
2.2 Statement of Compliance
The Group prepared these financial statements in accordance with Philippine Financial Reporting
Standards (PFRS) adopted by the Philippine Securities and Exchange Commission (SEC).
2.3 Presentation of the Financial Statements
The Group presents the statements of financial position in order of liquidity. An analysis regarding
recovery or settlement within 12 months after the reporting date (current) and more than 12 months
after the reporting date (non-current) is presented in Note 24.
The Group generally presents financial assets and financial liabilities at their gross amounts in the
statement of financial position, unless the offsetting criteria under PFRS are met. The Group does not
also set off items of income and expenses, unless offsetting is required or permitted by PFRS, or is
specifically disclosed in the Group’s accounting policies.
The Group presents its consolidated financial statements and parent company financial statements
side-by-side to comply with the requirements of the Bangko Sentral ng Pilipinas (BSP).
2.4 Basis of Consolidation
The consolidated financial statements comprise the financial statements of the Parent Company and
its subsidiaries. The financial statements of the subsidiaries are prepared on the same reporting
period as the Parent Company using consistent accounting policies. In the consolidation, the Group
eliminates in full all significant intra-group balances, transactions, and results of intra-group
transactions.
The Group consolidates its subsidiaries from the date on which the Group obtains control over the
subsidiary (see definition of ‘control’ in 2.12 Investments in Subsidiaries, Associates and Joint
Ventures). For partially-owned subsidiaries, the Group attributes the subsidiary’s income, expenses
and components of other comprehensive income (OCI) to the equity holders of the Parent Company
and to the non-controlling interests (NCI), even if this results in deficit balances of the NCI. NCI
represents the portion of profit or loss and the net assets not held by the Group, which are presented
separately in the consolidated financial statements. NCI consists of the amount attributed to such
interest from the date of business combination and its share in any changes in equity of the subsidiary.
When the Group’s ownership interest in a subsidiary changes but does not result in a loss of control,
the Group adjusts the carrying amounts of the controlling interests and the NCI to their new relative
interests in the subsidiary. The Group recognizes any difference between the amount by which the
NCI is adjusted and the fair value of the consideration paid or received directly in equity as ‘Other
equity reserves’, which is attributed to the owners of the Parent Company.
Consolidation of a subsidiary ceases when the Group loses control over the subsidiary. In such
circumstances, the Group derecognizes the assets (including goodwill), liabilities, NCI, and other
components of equity of the subsidiary, and recognizes the consideration received and any investment
retained at their fair values. The Group records any resulting difference in the statement of income as
‘Gain on loss of control of subsidiaries - net’.
*SGVFS169731*
-3-
2.5 Foreign Currency Translation
For financial reporting purposes, the Group translates all accounts in the FCDU books and foreign
currency-denominated accounts in the RBU books into their equivalents in Philippine pesos. Each
entity in the Group determines its own functional currency and items included in the consolidated
financial statements are measured using that functional currency.
2.5.1 Transactions and Balances
As at reporting date, the Group translates the following foreign currency-denominated accounts in the
RBU in Philippine peso using:
Financial statement accounts in RBU Exchange rate

Monetary assets and liabilities Bankers Association of the Philippines
(BAP) closing rate at end of year
Income and expenses Rate prevailing at transaction date
Non-monetary items measured at historical Rate at the date of initial transaction
cost in a foreign currency
Non-monetary items measured at fair value Rate at the date when fair value is
in a foreign currency determined
The Group recognizes in the statement of income any foreign exchange differences arising from
revaluation of monetary assets and liabilities. For non-monetary items measured at fair values, the
Group recognizes any foreign exchange differences arising from revaluation in line with the
recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on
items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI
or profit or loss, respectively).
2.5.2 FCDU and Overseas Branches and Subsidiaries
As at the reporting date, the Group translates the assets and liabilities of the FCDU and overseas
branches and subsidiaries in Philippine peso at the BAP closing rate prevailing at the reporting date,
and their income and expenses at the average exchange rate for the year. Foreign exchange
differences arising on translation are taken directly to OCI under ‘Accumulated Translation
Adjustment’. Upon disposal of a foreign entity or upon actual remittance of FCDU profits to RBU,
the deferred cumulative amount recognized in OCI relating to the particular foreign operation is
recognized in the statement of income.
2.6 Changes in Accounting Policies and Disclosures
The accounting policies adopted are consistent with those of the previous financial year, except for
the adoption of new standards effective as at January 1, 2022. The Group has not early adopted any
standard, interpretation or amendment that has been issued but is not yet effective. Unless otherwise
indicated, adoption of these new standards did not have an impact on the financial statements.
 Amendments to PFRS 3, Business Combinations: Reference to the Conceptual Framework

The amendments are intended to replace a reference to the Framework for the Preparation and
Presentation of Financial Statements issued in 1989, with a reference to the Conceptual
Framework for Financial Reporting issued in March 2018 without significantly changing its
requirements. An exception to the recognition principle of PFRS 3 was also added to avoid the
issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities that would
be within the scope of Philippine Accounting Standards (PAS) 37, Provisions, Contingent
*SGVFS169731*
-4-
Liabilities and Contingent Assets, or Philippine Interpretation IFRIC 21, Levies, if incurred
separately. The amendments add a new paragraph to PFRS 3 to clarify that contingent assets do
not qualify for recognition at the acquisition date. The amendments apply prospectively.
 Amendments to PAS 16, Property, Plant and Equipment: Proceeds Before Intended Use
The amendments prohibit entities to deduct from the cost of an item of property, plant and
equipment, any proceeds from selling items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management.
Instead, entities should recognize the proceeds from selling such items, and the costs of
producing those items, in profit or loss. The amendments are applied retrospectively to items of
property, plant and equipment made available for use on or after the beginning of the earliest
period presented when an entity first applies the amendment.
 Amendments to PAS 37, Onerous Contracts: Cost of Fulfilling a Contract

The amendments specify which costs an entity needs to include when assessing whether a
contract is onerous or loss-making. The amendments apply a “directly-related cost approach”.
The costs that relate directly to a contract to provide goods or services include both incremental
costs and an allocation of costs directly related to contract activities. General and administrative
costs do not relate directly to a contract and are excluded unless they are explicitly chargeable to
the counterparty under the contract. The amendments apply to contracts for which an entity has
not yet fulfilled all its obligations at the beginning of the annual reporting period in which it first
applies the amendments.
 Annual Improvements to PFRS Standards 2018-2020 Cycle

o Amendment to PFRS 1, First-time Adoption of Philippine Financial Reporting Standards:
Subsidiary as a first-time adopter
The amendment permits a subsidiary that elects to apply paragraph D16(a) of PFRS 1 to
measure cumulative translation differences using the amounts reported in the parent’s
consolidated financial statements, based on the parent’s date of transition to PFRS, if no
adjustments were made for consolidation procedures and for the effects of the business
combination in which the parent acquired the subsidiary. This amendment is also applied to
an associate or joint venture that elects to apply paragraph D16(a) of PFRS 1.
o Amendment to PFRS 9, Financial Instruments: Fees in the ‘10 per cent’ test for
derecognition of financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of
a new or modified financial liability are substantially different from the terms of the original
financial liability. These fees include only those paid or received between the borrower and
the lender, including fees paid or received by either the borrower or lender on the other’s
behalf.
o Amendment to PAS 41, Agriculture: Taxation in fair value measurements

The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude
cash flows for taxation when measuring the fair value of assets within the scope of PAS 41.
*SGVFS169731*
-5-
2.7 Business Combinations
The Group accounts for business combinations using the acquisition method. Under this method, the
Group measures the acquisition cost as the aggregate of the acquisition-date fair value of the
consideration transferred and any amount of NCI in the acquiree. The Group then allocates that cost to
the acquired identifiable assets and liabilities based on their respective fair values. Any excess
acquisition cost over the fair value of the net assets acquired is allocated to goodwill (see related
accounting policy under 2.13.3 Intangible Assets). If the fair value of the net assets acquired exceeds
the acquisition cost, the gain is recognized in the statement of income. The Group recognizes any
acquisition-related costs as administrative expenses as they are incurred. The Group also recognizes
any contingent consideration to be transferred by the acquirer at its fair value at the acquisition date.
In business combinations involving entities under common control, the Group determines whether or
not the business combination has commercial substance. When there is commercial substance, the
Group accounts for the transaction using the acquisition method as discussed above. Otherwise, the
Group accounts for the transaction similar to a pooling of interests (i.e., the assets and liabilities of the
acquired entities and that of the Group are reflected at their carrying values, and any resulting difference
with the fair value of the consideration given is accounted for as an equity transaction).
2.8 Non-current Assets and Disposal Group Held for Sale and Discontinued Operations
The Group classifies non-current assets and disposal group as held for sale if their carrying amounts will
be recovered principally through a sale transaction. As such, non-current assets and disposal groups are
measured at the lower of their carrying amounts and fair value less costs to sell (i.e., the incremental
costs directly attributable to the sale, excluding finance costs and income taxes).
The Group regards the criteria for held for sale classification as met only when:
 the Group has initiated an active program to locate a buyer;
 the Group is committed to the plan to sell the asset or disposal group, which should be available
for immediate sale in its present condition;
 the sale is highly probable (i.e, expected to happen within one year from the date of the
classification); and
 actions required to complete the plan indicate that it is unlikely that the plan will be significantly
changed or withdrawn.
The Group presents separately the assets and liabilities of disposal group classified as held for sale in
the statement of financial position.
The Group classifies a disposal group as discontinued operation if it is a component of the Group that
either has been disposed of, or is classified as held for sale, and:
 represents a separate major line of business or geographical area of operations;
 is part of a single coordinated plan to dispose of a separate major line of business or geographical
area of operations; or
 is a subsidiary acquired exclusively with a view to resale.
The Group excludes discontinued operations from the results of continuing operations and presents
them as a single amount as profit or loss after tax from discontinued operations in the statement of
income.
*SGVFS169731*
-6-
If the above criteria are no longer met, the Group ceases to classify the asset or disposal group as held
for sale. In such cases, the Group measures such asset or disposal group at the lower of its:
 carrying amount before it was classified as held for sale, adjusted for any depreciation, amortization
or revaluations that would have been recognized had it not been classified as such; and
 recoverable amount at the date of the subsequent decision not to sell.
The Group also amends financial statements for the periods since classification as held for sale if the
asset or disposal group that ceases to be classified as held for sale is a subsidiary, joint operation, joint
venture, associate, or a portion of an interest in a joint venture or an associate. Accordingly, for all
periods presented, the Group reclassifies and includes in income from continuing operations the results
of operations of the asset or disposal group previously presented in discontinued operations.
2.9 Fair Value Measurement
Fair value is the price that the Group would receive to sell an asset or pay to transfer a liability in an
orderly transaction between market participants at the measurement date (i.e., an exit price). The fair
value measurement is based on the presumption that these transactions take place either:
 in the principal market for the asset or liability; or
 in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Group. The Group
measures the fair value of an asset or a liability using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best
interest. If an asset or a liability measured at fair value has both bid and ask prices, the Group uses
the price within the bid-ask spread, which is the most representative of fair value in the
circumstances.
For nonfinancial assets, the Group measures their fair value considering a market participant’s ability
to generate economic benefits by using an asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described in Note 5, based on the lowest level input that is
significant to the fair value measurement as a whole.
2.10 Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash and other cash items
(COCI), amounts due from BSP and other banks, interbank loans receivable and securities held under
agreements to resell that are convertible to known amounts of cash, with original maturities of three
months or less from dates of placements and that are subject to an insignificant risk of changes in fair
value. Due from BSP includes statutory reserves required by the BSP, which the Group considers as
cash equivalents wherein drawings can be made to meet cash requirements.
*SGVFS169731*
-7-
2.11 Financial Instruments
2.11.1 Initial Recognition of Financial Instruments
The Group recognizes purchases or sales of financial assets that require delivery of assets within the
time frame established by regulation or convention in the marketplace on settlement date (i.e., the
date that an asset is delivered to or by the Group), while derivatives are recognized on trade date
(i.e., the date that the Group commits to purchase or sell). The Group recognizes deposits, amounts
due to banks and customers and loans when cash is received by the Group or advanced to the
borrowers.
All financial instruments are initially recognized at fair value. Except for financial instruments at
FVTPL, the initial measurement of financial instruments includes transaction costs.
2.11.2 Classification and Subsequent Measurement of Financial Instruments
The Group classifies and measures financial assets at FVTPL unless these are measured at FVOCI or
at amortized cost. The classification of financial assets depends on the contractual terms and the
business model for managing those financial assets.
The Group first assesses the contractual terms of financial assets to identify whether they pass the
contractual cash flows test (‘solely payments of principal and interest’ or SPPI test). For the purpose
of the SPPI test, principal is defined as the fair value of the financial asset at initial recognition and
may change over the life of the financial asset (for example, if there are repayments of principal or
amortization of the premium or discount). The most significant elements of interest within a lending
arrangement are typically the consideration for the time value of money and credit risk. In contrast,
contractual terms that introduce a more than insignificant exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending arrangement do not give rise to contractual
cash flows that are SPPI. In such cases, the financial asset is required to be measured at FVTPL.
Only financial assets that pass the SPPI test are eligible to be measured at FVOCI or at amortized
cost.
The Group determines its business model at the level that best reflects how it manages groups of
financial assets to achieve its business objective. The Group’s business model is not assessed on an
instrument-by-instrument basis, but at a higher level of aggregated portfolios. If cash flows after
initial recognition are realized in a way that is different from the Group’s original expectations, the
Group does not change the classification of the remaining financial assets held in that business model,
but incorporates such information when assessing newly originated or newly purchased financial
assets going forward.
For financial liabilities, the Group classifies them as either financial liabilities at FVTPL or financial
liabilities at amortized cost.
Financial assets at FVTPL

Financial assets at FVTPL include the following:
 Financial assets held for trading – those acquired for the purpose of selling or repurchasing in the
near term;
 Derivative instruments – contracts entered into by the Group (such as currency forwards,
currency swaps, interest rate swaps and warrants) as a service to customers and as a means of
reducing or managing their respective financial risk exposures, as well as for trading purposes;
*SGVFS169731*
-8-
 Financial assets that are not SPPI, irrespective of the business model; or
 Debt financial assets designated upon initial recognition at FVTPL – those assets where the
Group applied the fair value option at initial recognition if doing so eliminates or significantly
reduces an accounting mismatch
The Group carries financial assets at FVTPL in the statement of financial position at fair value.
Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is
negative. The Group recognizes any gains or losses arising from changes in fair values of financial
assets at FVTPL directly in the statement of income under ‘Trading and investment securities gains
(losses) - net’, except for currency forwards and currency swaps, where fair value changes are
included under ‘Foreign exchange gains - net’.
Financial assets at FVOCI

Financial assets at FVOCI include debt and equity securities, which are subsequently measured at fair
value. The Group recognizes the unrealized gains and losses arising from the fair valuation of
financial assets at FVOCI, net of tax, in the statement of comprehensive income as ‘Net change in
unrealized gain (loss) on financial assets at FVOCI’.
Debt securities at FVOCI are those that meet both of the following conditions:
 the asset is held within a business model whose objective is to hold the financial asset in order to
both collect contractual cash flows and sell the financial asset; and
 the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI
on the outstanding principal amount.
The Group reports the effective yield component of debt securities at FVOCI, as well as the impact of
restatement on foreign currency-denominated debt securities at FVOCI, in the statement of income.
When the debt securities at FVOCI are disposed of, the cumulative gain or loss previously recognized
in OCI is recognized as ‘Trading and investment securities gain (loss) - net’ in the statement of
income. The Group recognizes the expected credit losses (ECL) arising from impairment of such
financial assets in OCI with a corresponding charge to ‘Provision for impairment, credit and other
losses’ in the statement of income (see related accounting policy under 2.11.5 Impairment of
Financial Assets).
Equity securities designated at FVOCI are those that the Group made an irrevocable election at initial
recognition to present in OCI the subsequent changes in fair value. The Group recognizes the
dividends earned on holding the equity securities at FVOCI in the statement of income when the
right to payment has been established. Gains and losses on disposal of these equity securities at
FVOCI are never recycled to profit or loss, but the cumulative gain or loss previously recognized in
the OCI is reclassified to ‘Surplus’ or any other appropriate equity account upon disposal. The Group
does not subject equity securities at FVOCI to impairment assessment.
Financial assets at amortized cost

Financial assets at amortized cost are debt financial assets that meet both of the following conditions:
 the asset is held within a business model whose objective is to hold the financial asset in order to
collect contractual cash flows; and
 the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI
on the outstanding principal amount.
This accounting policy relates to the statement of financial position captions ‘Due from Bangko
Sentral ng Pilipinas’, ‘Due from other banks’, ‘Interbank loans receivable’, ‘Securities held under
agreements to resell’, ‘Investment securities at amortized cost’, and ‘Loans and receivables’.
*SGVFS169731*
-9-
The Group subsequently measures financial assets at amortized cost using the effective interest
method of amortization, less allowance for credit losses. The Group includes the amortization in
‘Interest income’, and the ECL arising from impairment of such financial assets in ‘Provision for
impairment, credit and other losses’ in the statement of income (see related accounting policy under
2.11.5 Impairment of Financial Assets).
Financial liabilities at amortized cost

The Group classifies issued financial instruments or their components which are not designated at
FVTPL, as financial liabilities at amortized cost under ‘Deposit liabilities’, ‘Bills and acceptances
payable’, ‘Bonds payable’ or other appropriate financial liability accounts. The substance of the
contractual arrangement for these instruments results in the Group having an obligation either to
deliver cash or another financial asset to the holder, or to satisfy the obligation other than by the
exchange of a fixed amount of cash or another financial asset for a fixed number of own equity
shares. The components of issued financial instruments that contain both liability and equity
elements are accounted for separately, with the equity component being assigned the residual amount
after deducting from the instrument as a whole the amount separately determined as the fair value of
the liability component on the date of issue.
The Group subsequently measures financial liabilities at amortized cost using the effective interest
method of amortization.
Repurchase and reverse repurchase agreements

The Group does not derecognize from the statement of financial position securities sold under
agreements to repurchase at a specified future date (‘repos’). Instead, the Group recognizes the
corresponding cash received, including accrued interest, as a loan to the Group, reflecting the
economic substance of such transaction.
Conversely, the Group does not recognize securities purchased under agreements to resell at a
specified future date (‘reverse repos’). The Group is not permitted to sell or repledge the securities in
the absence of default by the owner of the collateral. The Group recognizes the corresponding cash
paid, including accrued interest, as a loan to the counterparty. The difference between the purchase
price and resale price is treated as interest income and is accrued over the life of the agreement using
the effective interest method.
2.11.3 Reclassification of Financial Instruments
Subsequent to initial recognition, the Group may reclassify its financial assets only when there is a
change in the business models for managing these financial assets. Reclassification of financial
liabilities is not allowed.
2.11.4 Derecognition of Financial Instruments
Financial Assets
The Group derecognizes a financial asset (or, where applicable, a part of a financial asset or part of a
group of financial assets) when:
 the rights to receive cash flows from the asset have expired;
 the Group retains the right to receive cash flows from the asset, but has assumed an obligation to
pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or
 the Group has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained the risk and rewards of the asset but has transferred control over the asset.
*SGVFS169731*
- 10 -
Where the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, and has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control over the asset, the Group recognizes the asset only to the
extent of its continuing involvement in the asset. Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the lower of original carrying amount of the asset
and the maximum amount of consideration that the Group could be required to repay.
Financial assets are written off either partially or in their entirety only when the Group has stopped
pursuing recovery. If a write-off is later recovered, any amounts formerly charged are credited to
‘Recoveries’ under ‘Miscellaneous Income’ in the statements of income.
Financial liabilities
The Group derecognizes a financial liability when the obligation under the liability is discharged or
cancelled or has expired. Where an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially modified,
the Group treats such an exchange or modification as a derecognition of the original liability and
recognition of a new liability, and Group recognizes the difference in the respective carrying amounts
in the statement of income.
2.11.5 Impairment of Financial Assets
ECL methodology
The Group’s loss impairment method on financial instruments applies a forward-looking ECL
approach, which covers all loans and other debt financial assets not held at FVTPL, together with
loan commitments and financial guarantee contracts. The ECL allowance is based on the credit
losses expected to arise on a 12-month duration if there has been no significant increase in credit risk
(SICR) of the financial instrument since origination (12-month ECL). Otherwise, if an SICR is
observed, then the Group extends its ECL estimation until the end of the life of the financial
instrument (Lifetime ECL). Both Lifetime ECLs and 12-month ECLs are calculated on either an
individual basis or a collective basis, depending on the nature of the underlying portfolio of financial
instruments.
Staging assessment
The Group categorizes financial instruments subject to the ECL methodology into three stages:
 Stage 1 – comprised of all non-impaired financial instruments which have not experienced an
SICR since initial recognition. The Group recognizes 12-month ECL for Stage 1 financial
instruments.
 Stage 2 – comprised of all non-impaired financial instruments which have experienced an SICR
since initial recognition. The Group recognizes Lifetime ECL for Stage 2 financial instruments.
 Stage 3 – comprised of financial instruments which have objective evidence of impairment as a
result of one or more loss events that have occurred after initial recognition with a negative
impact on their estimated future cash flows. The Group recognizes Lifetime ECL for Stage 3
(credit-impaired) financial instruments.
Definition of “default” and “cure”

The Group considers default to have occurred when:
 the obligor is past due for more than 90 days on any material credit obligation to the Group; or
 the obligor is unlikely to pay its credit obligations to the Group in full, without recourse by the
Group to actions such as realizing collateral, as applicable.
*SGVFS169731*
- 11 -
The Group no longer considers an instrument to be in default when it no longer meets any of the
default criteria and has exhibited satisfactory and acceptable track record for six consecutive payment
periods, subject to applicable rules and regulations of the BSP.
Determining SICR
At each reporting date, the Group assesses whether the credit risk on a loan or credit exposure has
increased significantly since initial recognition. The Group’s assessment of SICR involves looking at
both the qualitative and quantitative elements, as well as if the loan or credit exposure is unpaid for at
least 30 days (“backstop”).
The Group assesses SICR on loans or credit exposures having potential credit weaknesses based on
current and/or forward-looking information that warrant management’s close attention. Such
weaknesses, if left uncorrected, may affect the repayment of these exposures. The loan or credit
exposure also exhibits SICR if there are adverse or foreseen adverse economic or market conditions
that may affect the counterparty’s ability to meet the scheduled repayments in the future.
The Group looks at the quantitative element through statistical models or credit ratings process or
scoring process that captures certain information, which the Group considers as relevant in assessing
changes in credit risk. The Group also looks at the number of notches downgrade of credit risk rating
(CRR) or certain thresholds for the probabilities of default being generated from statistical models to
determine whether SICR has occurred subsequent to initial recognition date.
Transfer between stages

The Group transfers credit exposures from Stage 1 to Stage 2 if there is an SICR from initial
recognition date. In subsequent reporting periods, if the credit risk of the financial instrument
improves such that there is no longer an SICR since initial recognition, then the Group reverts them to
Stage 1.
The Group transfers credit exposures from Stage 3 (non-performing) to Stage 1 (performing) when
there is sufficient evidence to support their full collection. Such exposures should exhibit both of the
following indicators:
 quantitative – characterized by payments made within an observation period; and
 qualitative – pertain to the results of assessment of the borrower’s financial capacity.
Generally, the Group considers that full collection is probable when payments of interest and/or
principal are received for at least six months.
Modified or restructured loans and other credit exposures

In certain circumstances, the Group modifies the original terms and conditions of a credit exposure to
form a new loan agreement or payment schedule, which may be provided depending on the
borrower’s current or expected financial difficulties. Modifications may include, but are not limited
to, change in interest rate and terms, principal amount, maturity date and schedule of periodic
payments.
If modifications are considered by the Group as substantial based on qualitative factors, the loan is
derecognized as discussed under 2.11.4 Derecognition of Financial Instruments.
*SGVFS169731*
- 12 -
If a loan or credit exposure has been renegotiated or modified without resulting in derecognition, the
Group records a modification gain or loss, to the extent that an impairment loss has not already been
recorded, based on the change in cash flows discounted at the loan’s original effective interest rate
(EIR). The Group also assesses whether there has been a SICR by comparing the risk of default at
reporting date based on modified terms, and the risk of default at initial recognition date based on
original terms. Derecognition decisions and classification between Stages 2 and 3 are determined on
a case-by-case basis.
Purchased or originated credit-impaired loans

The Group considers a loan as credit-impaired on purchase or origination if there is evidence of
impairment at the time of initial recognition (i.e., acquired/purchased at a deep discounted price). The
Group recognizes the cumulative changes in Lifetime ECL since initial recognition as a loss
allowance for purchased or originated credit-impaired loan.
Measurement of ECL
ECLs are generally measured based on the risk of default over one of two different time horizons,
depending on whether there has been SICR since initial recognition. ECL calculations are based on
the following components:
 Probability of default (PD) – an estimate of the likelihood that a borrower will default on its
obligations over the next 12 months for Stage 1 or over the remaining life of the credit exposure
for Stages 2 and 3.
 Loss-given-default (LGD) – an estimate of the loss arising in case where default occurs at a given
time. It is based on the difference between the contractual cash flows due and those that the
Group would expect to receive, including from any collateral.
 Exposure-at-default (EAD) – an estimate of the exposure at a future/default date taking into
account expected changes in the exposure after the reporting date, including repayments of
principal and interest, expected drawdown on committed facilities and accrued interest from
missed payments.
 Discount rate – represents the rate to be used to discount an expected loss to present value at the
reporting date using the original EIR determined at initial recognition.
In measuring ECL, the Group considers forward-looking information depending on the credit
exposure. The Group applies experienced credit judgment, which is essential in assessing the
soundness of forward-looking information and in ensuring that these are adequately supported.
Forward-looking macroeconomic information and scenarios consider:
 factors that may affect the general economic or market conditions in which the Group operates,
such as gross domestic product growth rates, foreign exchange rates, inflation rate, among others;
 changes in government policies, rules and regulations, such as adjustments to policy rates;
 other factors pertinent to the Group, including the proper identification and mitigation of risks
such as incidences of loan defaults or losses.
The Group also measures ECL by evaluating a range of possible outcomes and using reasonable and
supportable pieces of information that are available without undue cost or effort at the reporting date
about past events, current conditions and forecasts of future economic conditions.
2.11.6 Financial Guarantees and Undrawn Loan Commitments
The Group gives loan commitments and financial guarantees consisting of letters of credit, letters of
guarantees, and acceptances.
*SGVFS169731*
- 13 -
Financial guarantees are contracts that require the Group as issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payments when due
in accordance with the terms of a debt instrument. The Group initially recognizes financial
guarantees on trade receivables at fair value under ‘Bills and acceptances payable’ or ‘Other
liabilities’ in the statement of financial position. Subsequent to initial recognition, the Group
measures these financial guarantees at the higher of:
 the initial fair value less any cumulative amount of income or amortization recognized in the
statement of income; and
 the ECL determined under PFRS 9.
Undrawn loan commitments and letters of credit are commitments under which, over the duration of
the commitment, the Group is required to provide a loan with pre-specified terms to the customer.
The nominal contractual value of financial guarantees and undrawn loan commitments, where the
loan agreed to be provided is on market terms, are not recorded in the statement of financial position.
The Group estimates the expected portion of the undrawn loan commitments that will be drawn over
their expected life. The ECL related to financial guarantees and loan commitments without
outstanding drawn amounts is recognized in ‘Allowance for credit losses’ under ‘Loans and
receivables’.
2.12 Investments in Subsidiaries, Associates and Joint Ventures
The Group’s subsidiaries pertain to investees where the Group demonstrates control. The Group
controls an investee if, and only if, the Group has:
 power over the investee (i.e., those existing rights that give the Group the current ability to direct
the relevant activities of the investee);
 exposure or rights to variable returns from its involvement with the investee; and
 the ability to use its power over the investee to affect its returns.
When the Group has less than majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
such as contractual arrangements with other voting shareholders of the investee, rights arising from
other contractual arrangements, or any potential voting rights of the Group.
The Group’s associate pertains to the investee over which the Group has significant influence, which
is the power to participate in the financial and operating policy decisions of the investee, but is not
control or joint control over those policies. The Group’s joint venture pertains to joint arrangements
whereby the Group and other parties have joint control of the arrangement and have rights to the net
assets of the arrangement.
The Group accounts for its investments in subsidiaries, associates and joint venture under the equity
method of accounting. Under this method, the Group carries the investment in the statement of
financial position at cost plus post-acquisition changes in the share in the net assets of the investee
less accumulated impairment losses, if any (see related accounting policy under 2.13.5 Impairment of
Nonfinancial Assets). The Group reflects its share in the results of operations of the investee and any
impairment losses in the statement of income. When there has been a change recognized in the
investee’s OCI, the Group recognizes its share in any changes and discloses this in the statement of
comprehensive income. The Group eliminates any profits or losses arising from transactions between
the Group and the investee to the extent of the interest of the Group in the investee. Once the
Group’s interest is reduced to zero, additional losses are provided for, and a liability is recognized,
*SGVFS169731*
- 14 -
only to the extent that the Group has incurred legal or constructive obligations or made payments on
behalf of the investee.
When a change in ownership interest in a subsidiary occurs which results in a loss of control over the
subsidiary, the Parent Company:
 Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
 Derecognizes the carrying amount of any non-controlling interest;
 Derecognizes the related OCI recorded in equity and recycles the same to statement of income or
‘Surplus’;
 Recognizes the fair value of the consideration received;
 Recognizes the fair value of any investment retained;
 Recognizes any surplus or deficit in the statement of income; and
 Reclassifies the Parent Company’s share of components’ gains (losses) previously recognized in
OCI to profit or loss or surplus, as appropriate, as would be required if the Group had directly
disposed of the related assets or liabilities.
Upon loss of control over a subsidiary or significant influence over an associate, the Group measures
and recognizes any retained investment at its fair value. Any resulting difference between the
aggregate of the investee’s carrying amount upon disposal and the fair value of the retained
investment, and proceeds from disposal is recognized in the statement of income.
For transactions where ownership interest in a subsidiary, associate or joint venture that did not result
in a loss of control or significant influence, as applicable, the Parent Company recognizes the gain or
loss in the profit and loss representing the difference between the proceeds from sale and the carrying
value of the investment.
2.13 Other Nonfinancial Assets
2.13.1 Property and Equipment
The initial cost of property and equipment consists of its purchase price, including import duties,
taxes and any directly attributable costs of bringing the asset to its working condition and location for
its intended use (see related accounting policy under 2.16.5 Expenditures on Nonfinancial Assets).
The Group carries its land at cost less any impairment in value, and its depreciable properties such as
buildings, right-of-use assets, furniture, fixtures and equipment, long-term leasehold land, and
leasehold improvements at cost less accumulated depreciation and amortization and any impairment
in value (see related accounting policy under 2.13.5 Impairment of Nonfinancial Assets).
For right-of-use assets included under ‘Property and equipment’, see related accounting policy under
2.18.1 Group as a Lessee Under Lease Contracts.
2.13.2 Investment Properties and Chattel Mortgage Properties
The Group initially measures investment properties and chattel mortgage properties initially at cost,
including transaction costs (see related accounting policy under 2.16.5 Expenditures on Nonfinancial
Assets). When the investment property or chattel mortgage property is acquired through an exchange
transaction, the Group measures the asset at its fair value, unless the fair value of such an asset cannot
be reliably measured in which case the asset acquired is measured at the carrying amount of asset
given up. The Group recognizes any gain or loss on exchange in the statement of income under ‘Net
gains (losses) on sale or exchange of assets’.
*SGVFS169731*
- 15 -
Foreclosed properties are classified under ‘Investment properties’ upon:

 entry of judgment in case of judicial foreclosure;
 execution of the Sheriff’s Certificate of Sale in case of extra-judicial foreclosure; or
 notarization of the Deed of Dacion in case of payment in kind (dacion en pago).
Subsequent to initial recognition, the Group carries the investment properties and chattel mortgage
properties at cost less accumulated depreciation (for depreciable properties) and any impairment in
value (see related accounting policy under 2.13.5 Impairment of Nonfinancial Assets).
The Group transfers assets to investment properties when, and only when, there is a change in use
evidenced by ending of owner occupation, commencement of an operating lease to another party or
ending of construction or development. Conversely, the Group transfers out of investment properties
when, and only when, there is a change in use evidenced by commencement of owner occupation or
commencement of development with a view to sale.
2.13.3 Intangible Assets
The Group initially measures separately acquired intangible assets at cost, and the intangible assets
acquired in a business combination at their fair values at the date of acquisition. The Group does not
capitalize internally generated intangibles, excluding capitalized development costs, and reflects in
profit or loss the related expenditures in the period in which the expenditure is incurred.
Intangibles with finite lives

The Group capitalizes software costs, included in ‘Intangible assets’, on the basis of the cost incurred
to acquire and bring to use the specific software (see related accounting policy under 2.16.5
Expenditures on Nonfinancial Assets).
Customer relationship intangibles (CRI) and core deposits intangibles (CDI) are the intangible assets
acquired by the Group through business combination. The Group initially measures these intangible
assets at their fair values at the date of acquisition. The fair value of these intangible assets reflects
expectations about the probability that the expected future economic benefits embodied in the asset
will flow to the Group.
Following initial recognition, intangibles with finite lives are measured at cost less accumulated
amortization and any accumulated impairment losses (see related accounting policy under 2.13.5
Impairment of Nonfinancial Assets).
Goodwill
The Group initially measures goodwill acquired in a business combination at cost. With respect to
investments in an associate, the Group includes goodwill in the carrying amount of the investments.
Goodwill is not amortized, but is tested for impairment annually or more frequently if events or
changes in circumstances that the carrying value may be impaired (see related accounting policy
under 2.13.5 Impairment of Nonfinancial Assets).
2.13.4 Derecognition of Nonfinancial Assets
The Group derecognizes a nonfinancial asset when it has either been disposed of or when the asset is
permanently withdrawn from use and no future benefit is expected from its disposal. The Group
recognizes any gains or losses on the disposal of a nonfinancial asset in the statement of income
under ‘Net gains (losses) on sale or exchange of assets’ in the period the asset is derecognized.
*SGVFS169731*
- 16 -
2.13.5 Impairment of Nonfinancial Assets
Property and equipment, investment properties, intangible assets with finite lives, chattel mortgage
properties, and investments in subsidiaries and an associate
At each reporting date, the Group assesses whether there is any indication that its property and
equipment, investment properties, intangible assets with finite lives, chattel mortgage properties, and
investments in subsidiaries and an associate may be impaired. When an indicator of impairment
exists, the Group makes a formal estimate of recoverable amount. Recoverable amount is the higher
of an asset’s fair value less costs to sell and its value-in-use (VIU) and is determined for an individual
asset, unless the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets, in which case the recoverable amount is assessed as part of the cash-
generating unit (CGU) to which it belongs.
When the carrying amount of an asset exceeds its recoverable amount, the Group considers the asset
as impaired and writes the asset down to its recoverable amount. In assessing VIU, the Group
discounts the estimated future cash flows to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset.
The Group charges the impairment loss against current operations. At each reporting date, the Group
assesses whether there is any indication that previously recognized impairment losses may no longer
exist or may have decreased. If such indication exists, the Group estimates the recoverable amount
and reverses a previously recognized impairment loss only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognized. The
reversal recognized in the statement of income cannot exceed the carrying amount that would have
been determined, net of depreciation and amortization, had no impairment loss been recognized for
the asset in prior years. After such reversal, the Group adjusts the depreciation and amortization in
future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining life.
Goodwill
The Group performs its annual impairment test of goodwill every fourth quarter, or more frequently if
events or changes in circumstances indicate that the carrying value may be impaired.
The Group determines impairment for goodwill by assessing the recoverable amount of the CGU (or
group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU (or group
of CGUs) is less than the carrying amount of the CGU (or group of CGUs) to which goodwill has
been allocated (or to the aggregate carrying amount of a group of CGUs to which the goodwill relates
but cannot be allocated), the Group recognizes an impairment loss immediately in the statement of
income under ‘Provision for impairment, credit and other losses’. Impairment losses relating to
goodwill cannot be reversed for subsequent increases in its recoverable amount in future periods.
2.14 Equity
2.14.1 Capital Stock
The Group measures capital stock at par value for all shares issued and outstanding. When the shares
are sold at a premium, the Group credits the difference between the proceeds and the par value to
‘Capital paid in excess of par value’. ‘Surplus’ represents accumulated earnings (losses) of the Group
less dividends declared.
*SGVFS169731*
- 17 -
2.14.2 Reserves Recorded in Equity
The reserves recorded in equity in the statement of financial position include:

 Remeasurement losses on retirement plan – pertains to the remeasurement comprising actuarial
gains or losses on the present value of the defined benefit obligation, net of return on plan assets
(see related accounting policy under 2.17.1 Retirement Under Defined Benefit Plan).
 Accumulated translation adjustment – used to record exchange differences arising from the
translation of the FCDU accounts and foreign operations (i.e., overseas branches and subsidiaries)
to Philippine peso (see related accounting policy under 2.5.2 FCDU and Overseas Branches and
Subsidiaries).
 Net unrealized gains (losses) on financial assets at FVOCI – comprises changes in fair value of
financial assets at FVOCI (see related accounting policy under 2.11.2 Classification and
Subsequent Measurement of Financial Instruments).
2.14.3 Dividends
The Group recognizes dividends on common shares as a liability and deduction against ‘Surplus’
when approved by the Board of Directors (BOD) of the Parent Company. The Group measures the
liability to distribute dividends at the carrying amount of the dividends, except for distributions of
non-cash assets where the Group measures the liability at the fair value of the assets to be distributed.
At the end of each reporting period and at the date of settlement, the Group reviews and adjusts the
carrying amount of the non-cash assets declared as dividends, with any changes in the carrying
amount of the non-cash dividends recognized in equity as adjustments to the amount of distribution.
For dividends that are approved after the reporting date, the Group discloses them in the financial
statements as an event after the reporting date.
2.14.4 Securities Issuance Costs
The Group capitalizes the issuance, underwriting and other related expenses incurred in connection
with the issuance of debt securities (other than debt securities designated at FVTPL) and amortizes
over the terms of the instruments using the effective interest method. The Group includes any
unamortized debt issuance costs in the carrying value of the related debt instruments in the statement
of financial position.
For underwriting, share registration, and other share issuance costs and taxes incurred in connection
with the issuance of equity securities, the Group accounts for these costs as reduction of equity
against ‘Capital paid in excess of par value’. If the ‘Capital paid in excess of par value’ is not
sufficient, the share issuance costs are charged against the ‘Surplus’. For transaction costs that relate
jointly to the offering and listing of the shares, the Group allocates the costs to those transactions (i.e.,
reduction against equity for those allocated to offering of shares, and expensed for those allocated to
listing of shares) using a basis of allocation that is rational and consistent with similar transactions.
2.15 Revenue Recognition
Revenue is recognized upon transfer of services to the customer at an amount that reflects the
consideration to which the Group expects to be entitled in exchange for those services. The Group
assesses its revenue arrangements against specific criteria in order to determine if it is acting as
principal or agent. The Group has concluded that it is acting as a principal in all of its revenue
arrangements except for brokerage transactions.
*SGVFS169731*
- 18 -
2.15.1 Interest Income
Interest on interest-bearing financial assets at FVTPL and held-for-trading investments is recognized

based on contractual rate. Interest on financial instruments measured at amortized cost and FVOCI
are recognized based on effective interest method of accounting to calculates the amortized cost of a
financial asset or a financial liability and allocate the interest income or interest expense.
The Group records interest income using the EIR, which is the rate that exactly discounts estimated
future cash payments or receipts through the expected life of the financial instrument or a shorter
period, where appropriate, to the net carrying amount of the financial asset or financial liability. In
calculating EIR, the Group considers all contractual terms of the financial instrument (for example,
prepayment options), and includes any fees or incremental costs that are directly attributable to the
instrument and are an integral part of the EIR, but not future credit losses. The Group adjusts the
carrying amount of the financial instrument through ‘Interest income’ in the statement of income
based on the original EIR.
When a financial asset becomes credit-impaired and is, therefore, regarded as Stage 3, the Group
calculates interest income by applying the EIR to the net amortized cost of the financial asset. If the
financial asset cures and is no longer credit-impaired, the Group reverts to calculating interest income
on a gross basis.
The Group defers the commitment fees for loans that are likely to be drawn down (together with any
incremental costs) and includes them as part of the EIR of the loan. These are amortized using EIR
and recognized as ‘Interest income’ over the expected life of the loan.
The Group recognizes income on direct financing leases and receivables financed using the effective
interest method and any unearned discounts are shown as deduction against ‘Loans and receivables’.
Unearned discounts are amortized over the term of the note or lease using the effective interest
method and consist of:
 transaction and finance fees on finance leases and loans and receivables financed with long-term
maturities; and
 excess of the aggregate lease rentals plus the estimated residual value of the leased equipment
over its cost.
2.15.2 Service Fees and Commission Income
The Group earns fee and commission income from diverse range of services it provides to its
customers:
Fees from services that are provided over a certain period of time
The Group accrues fees earned for the provision of services over a period of time. These fees include
investment fund fees, custodian fees, fiduciary fees, credit-related fees, trust fees, portfolio and other
management fees, and advisory fees.
Bancassurance fees
The Group recognizes non-refundable access fees on a straight-line basis over the term of the period
of the provision of the access. Milestone fees or variable and fixed earn-out fees are recognized in
reference to the stage of achievement of the milestones.
*SGVFS169731*
- 19 -
Fee income from providing transaction services

The Group recognizes the fees arising from negotiating or participating in the negotiation of a
transaction for a third party, such as the arrangement of the acquisition of shares or other securities or
the purchase or sale of businesses, only upon completion of the underlying transaction. For fees or
components of fees that are linked to a certain performance, the Group recognizes revenue after
fulfilling the corresponding criteria. These fees include underwriting fees, corporate finance fees,
remittance fees, brokerage fees, commissions, deposit-related and other credit-related fees.
The Group recognizes loan syndication fees as revenue when the syndication has been completed and
the Group retains no part of the loans for itself or retains part at the same EIR as the other
participants.
2.15.3 Credit Card Revenues
Interchange fees and revenue from rewards redeemed

The Group takes up as income the interchange fees under ‘Service fees and commission income’
upon receipt from member establishments of charges arising from credit availments by the Group’s
cardholders. These discounts are computed based on certain agreed rates and are deducted from
amounts remitted to the member establishments.
The Group operates a loyalty points program which allows customers to accumulate points when they
purchase from member establishments using the issued card of the Group. The points can then be
redeemed for free products subject to a minimum number of points being redeemed.
The Group allocates a portion of the consideration received from discounts earned and interchange
fees from credit cards to the reward points based on the estimated stand-alone selling prices. The
Group defers the amount allocated to the loyalty program and recognizes revenue only when the
loyalty points are redeemed or the likelihood of the credit cardholder redeeming the loyalty points
becomes remote. The Group includes the deferred balance under ‘Other liabilities’ in the statement
of financial position.
Commissions on credit cards

The Group recognizes commissions earned as revenue upon receipt from member establishments of
charges arising from credit availments by credit cardholders. These commissions are computed based
on certain agreed rates and are deducted from amounts remittable to member establishments.
Commissions on installment credit sales

The Group records the purchases by the credit cardholders, collectible on installment basis, at the cost
of the items purchased plus certain percentage of cost. The Group recognizes the excess over cost as
‘Unearned and other deferred income’, which is shown as a deduction from ‘Loans and receivables’
in the statement of financial position. The Group amortizes and recognizes as ‘Interest income’ the
unearned and other deferred income over the installment terms using the effective interest method.
2.15.4 Trading and Investment Securities Gains - Net
The Group recognizes in ‘Trading and investment securities gains - net’ the results arising from
trading activities, all gains and losses from changes in fair value of financial assets and financial
liabilities at FVTPL, and gains and losses from disposal of debt securities at FVOCI.
*SGVFS169731*
- 20 -
2.15.5 Gain on Sale or Exchange of Assets
The Group recognizes gain on sale or exchange of assets upon completion of the earning process
upon transfer of control and when the collectability of the sales price is reasonably assured.
2.15.6 Other Income
Rental income
The Group accounts for rental income arising on leased properties on a straight-line basis over the
lease terms, which is recorded in the statement of income under ‘Miscellaneous income’ (see related
accounting policy under 2.18.2 Group as a Lessor Under Lease Contracts).
Dividend income
The Group recognizes dividend income when the Group’s right to receive payment is established.
Insurance premiums and commissions on reinsurance

Gross insurance written premiums comprise the total premiums receivable for the whole period of
cover provided by contracts entered into during the accounting period. Premiums include any
adjustments arising in the accounting period for premiums receivable in respect of business written in
prior periods. The Group recognizes premiums from short-duration insurance contracts and
reinsurance commissions as revenue over the period of the contracts using the 24th method, except
for marine cargo where the provision for unearned premiums pertain to the premiums for the last two
months of the year. The Group recognizes in the statement of income for the period the net changes
in provisions for unearned premiums and deferred reinsurance premiums.
2.16 Expenditures
2.16.1 Borrowing Costs
The Group recognizes borrowing costs as ‘Interest expense’ in the year in which these costs are
incurred. Borrowing costs consist of interest expense calculated using the effective interest method
that the Group incurs in connection with borrowing of funds.
2.16.2 Operating Expenses
This encompasses those expenses that arise in the course of the ordinary activities of the Group, as
well as any losses incurred. These are recognized in the statement of income as they are incurred.
2.16.3 Taxes and Licenses
This includes all other taxes, local and national, including gross receipts taxes, documentary stamp
taxes, real estate taxes, licenses and permit fees that are recognized when incurred.
*SGVFS169731*
- 21 -
2.16.4 Depreciation and Amortization
The Group computes for depreciation and amortization of depreciable assets using the straight-line
method over the estimated useful lives of the respective assets. The estimated useful lives of the
depreciable assets follow:
Years
Property and equipment:
Buildings 25 - 50
Right-of-use assets 1 - 25 or the lease term,
whichever is shorter
(provided that lease term
is more than one year)
Furniture, fixtures and equipment 5
Long-term leasehold land 46 - 50
Leasehold improvements 10 or the lease term,
whichever is shorter
Investment properties 10 - 25
Chattel mortgage properties 5
Intangible assets with finite lives:
Software costs 5
CDI 10
CRI 3
The Group reviews periodically the useful life and the depreciation and amortization method to
ensure that these are consistent with the expected pattern of economic benefits from the depreciable
assets. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset are considered to modify the depreciation and amortization period or
method, as appropriate, and are treated as changes in accounting estimates.
2.16.5 Expenditures on Nonfinancial Assets
The Group charges against current operations the expenditures incurred after the nonfinancial assets
(i.e., property and equipment, investment properties, software costs, and chattel mortgage properties)
have been put into operation, such as repairs and maintenance. In situations where it can be clearly
demonstrated that the expenditures have resulted in an increase in the future economic benefits
expected to be obtained from the use of these nonfinancial assets beyond their originally assessed
standard of performance, the Group capitalizes such expenditures as additional cost.
2.17 Employee Benefits
2.17.1 Retirement Under Defined Benefit Plan
At the end of the reporting period, the Group determines its net defined benefit liability (or asset) as
the difference between the present value of the defined benefit obligation and the fair value of plan
assets, adjusted for any effect of asset ceiling. The asset ceiling is the present value of any economic
benefits available in the form of refunds from the plan or reductions in future contributions to the
plan. The cost of providing benefits under the defined benefit plan is actuarially determined using the
projected unit credit method.
*SGVFS169731*
- 22 -
Defined benefit costs recognized in the statement of income consist of the following:
 service costs – include current service costs, past service costs (recognized when plan amendment
or curtailment occurs) and gains or losses on non-routine settlements; and
 net interest on the net defined benefit liability or asset – pertains to the change during the period
in the net defined benefit liability (or asset) that arises from the passage of time, which is
determined by applying the discount rate based on government bonds to the net defined benefit
liability or asset.
Changes in the net defined benefit liability (or asset) also include remeasurements comprising
actuarial gains and losses, return on plan assets and any change in the effect of the asset ceiling,
excluding net interest on defined benefit liability (or asset). The Group recognizes these
remeasurements immediately in OCI in the period in which they arise. The Group does not reclassify
these remeasurements to profit or loss in subsequent periods.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance
policies, and are not available to the creditors of the Group, nor can they be paid directly to the
Group. Fair value of plan assets is based on market price information. When no market price is
available, the Group estimates the fair value of plan assets by discounting expected future cash flows
using a discount rate that reflects both the risk associated with the plan assets and the maturity or
expected disposal date of those assets (or, if they have no maturity, the expected period until the
settlement of the related obligations).
The Group recognizes its right to be reimbursed of some or all of the expenditure required to settle a
defined benefit obligation as a separate asset at fair value when and only when reimbursement is
virtually certain.
2.17.2 Employee Leave Entitlement
The Group recognizes entitlements of employees to annual leave as a liability when they are accrued
to the employees. The Group recognizes the undiscounted liability for leave expected to be settled
wholly before 12 months after the end of the reporting period for services rendered by employees up
to the end of the reporting period. For leave entitlements expected to be settled for more than 12
months after the reporting date, the Group engages an actuary to estimate the long-term liability,
which is reported in ‘Accrued taxes, interest and other expenses’ in the statement of financial
position.
2.17.3 Share-Based Payment
Employees of the Parent Company receive remuneration in the form of share-based payments, where
employees render services as consideration for equity instruments. The Parent Company determines
the cost of equity-settled transactions at fair value at the date when the grant is made, and recognizes
as ‘Compensation and fringe benefits’, together with a corresponding increase in equity (‘Other
equity reserves’), over the period in which the service is fulfilled. The cumulative expense
recognized for equity-settled transactions at each reporting date until the vesting date reflects to the
extent to which the vesting period has expired and the Parent Company’s best estimate of the number
of equity instruments that will ultimately vest. The expense or credit in the statement of income for a
period represents the movement in the cumulative expense recognized as at the beginning and end of
the period.
*SGVFS169731*
- 23 -
2.18 Leases
The Group determines at contract inception whether a contract is, or contains, a lease by assessing
whether the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration.
2.18.1 Group as a Lessee Under Lease Contracts
The Group applies a single recognition and measurement approach for all leases, except for short-
term leases and leases of low-value assets. The Group recognizes right-of-use assets representing the
right to use the underlying assets and lease liabilities to make lease payments.
 Right-of-use assets
At the commencement date of the lease (i.e, the date the underlying asset is available for use), the
Group recognizes right-of-use assets measured at cost. The cost of right-of-use assets includes
the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made
at or before the commencement date less any lease incentives received. Subsequent to initial
recognition, the Group measures the right-of-use assets at cost less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease liabilities.
The Group presents the right-of-use assets in ‘Property and equipment’ and subjects it to
impairment in line with the Group’s policy on impairment of nonfinancial assets (see related
accounting policy under 2.13.5 Impairment of Nonfinancial Assets).
 Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term discounted using the Group’s
incremental borrowing rate, which is the rate of interest that the Group would have to pay to
borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a
similar value to the right-of-use asset in a similar economic environment. The lease payments
include fixed payments, any variable lease payments that depend on an index or a rate, and any
amounts expected to be paid under residual value guarantees. The lease payments also include
the exercise price of a purchase option reasonably certain to be exercised by the Group and
payments of penalties for terminating the lease, if the lease term reflects exercising the option to
terminate. Variable lease payments that do not depend on an index or a rate are recognized as
expenses in the period in which the event or condition that triggers the payment occurs.
After the commencement date of the lease, the Group measures the lease liabilities by increasing
the carrying amount to reflect interest on the lease liabilities (recorded in ‘Interest expense on
bills payable and other borrowings’), reducing the carrying amount to reflect the lease payments
made, and remeasuring the carrying amount to reflect any reassessment or lease modifications, or
to reflect revised in-substance fixed lease payments.
 Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its leases that have a lease term
of 12 months or less from the commencement date and do not contain a purchase option, and the
leases of low-value assets recognition exemption to its leases of ATM offsite locations and other
equipment that are considered of low value (i.e., below =P250,000). Lease payments on short-term
leases and leases of low-value assets are recognized as expense under ‘Occupancy and
equipment-related costs’ on a straight-line basis over the lease term.
*SGVFS169731*
- 24 -
2.18.2 Group as a Lessor Under Lease Contracts
For finance leases where the Group transfers substantially all the risks and rewards incidental to
ownership of the leased item, the Group recognizes a lease receivable in the statement of financial
position at an amount equivalent to the net investment (asset cost) in the lease. The Group includes
all income resulting from the receivable in ‘Interest income on loans and receivables’ in the statement
of income.
The residual value of leased assets, which approximates the amount of guaranty deposit paid by the
lessee at the inception of the lease, is the estimated proceeds from the sale of the leased asset at the
end of the lease term. At the end of the lease term, the residual value of the leased asset is generally
applied against the guaranty deposit of the lessee when the lessee decides to buy the leased asset.
In operating leases where the Group does not transfer substantially all the risks and rewards incidental
to ownership of an asset, the Group recognizes rental income on a straight-line basis over the lease
terms. The Group adds back the initial direct costs incurred in negotiating and arranging an operating
lease to the carrying amount of the leased asset and recognizes them as rental income over the lease
term on the same basis. The Group recognizes contingent rents as revenue in the period in which
they are earned.
2.19 Provisions
The Group recognizes provisions when:

 the Group has a present obligation (legal or constructive) as a result of a past event;
 it is probable that an outflow of assets embodying economic benefits will be required to settle the
obligation; and
 a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example, under an insurance
contract, the Group recognizes the reimbursement as a separate asset but only when the
reimbursement is virtually certain. The Group presents the expense relating to any provision in the
statement of income, net of any reimbursement.
If the effect of the time value of money is material, the Group determines provisions by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability. When discounting is used,
the Group recognizes the increase in the provision due to the passage as ‘Interest expense on bills
payable and other borrowings’.
2.20 Contingencies
Contingent liabilities are not recognized in the financial statements but are disclosed unless the
possibility of an outflow of assets embodying economic benefits is remote. Contingent assets are not
recognized but are disclosed in the financial statements when an inflow of economic benefits is
probable.
2.21 Income Taxes
Income tax on profit and loss for the year comprises current and deferred tax. Income tax is
determined in accordance with tax laws and is recognized in the statement of income, except to the
extent that it relates to items directly recognized in OCI.
*SGVFS169731*
- 25 -
2.21.1 Current Tax
The Group measures current tax assets and liabilities for the current periods at the amount expected to
be recovered from or paid to the taxation authorities using the tax rates and tax laws that are enacted
or substantively enacted at the reporting date.
2.21.2 Deferred Tax
The Group provides for deferred tax using the balance sheet liability method on all temporary
differences at the reporting date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
The Group recognizes deferred tax liabilities for all taxable temporary differences, including asset
revaluations. The Group recognizes deferred tax assets for all deductible temporary differences,
carryforward of unused tax credits from the excess of minimum corporate income tax (MCIT) over
the regular corporate income tax (RCIT), and unused net operating loss carryover (NOLCO), to the
extent that it is probable that sufficient taxable income will be available against which the deductible
temporary differences and carryforward of unused tax credits from MCIT and unused NOLCO can be
utilized.
The Group, however, does not recognize deferred tax on temporary differences that arise from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting income nor taxable income. The Group does
not also provide deferred tax liabilities on non-taxable temporary differences associated with
investments in domestic subsidiaries and an associate. With respect to investments in foreign
subsidiaries, the Group does not recognize deferred tax liabilities, except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference
will not reverse in the foreseeable future.
The Group reviews the carrying amount of deferred tax assets at each reporting date and reduces the
recognized amount to the extent that it is no longer probable that sufficient future taxable income will
be available to allow all or part of the deferred income tax asset to be utilized. The Group reassesses
unrecognized deferred tax assets at each reporting date and recognizes amounts to the extent that it
has become probable that future taxable income will allow the deferred tax asset to be recovered.
The Group measures deferred tax assets and liabilities at the tax rates that are applicable to the period
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the reporting date.
For current and deferred tax relating to items recognized directly in OCI, the Group recognizes them
also in OCI and not in the statement of income.
In the consolidated financial statements, the Group offsets deferred tax assets and liabilities if a
legally enforceable right exists to set off current tax assets against current tax liabilities and deferred
taxes related to the same taxable entity and the same taxation authority.
When tax treatments involve uncertainty, the Group determines whether to consider each uncertain
tax treatment separately or together with one or more other uncertain tax treatments and uses the
approach that better predicts the resolution of the uncertainty. If the Group concludes that it is not
probable that the taxation authority will accept an uncertain tax treatment, the Group reflects the
effect of the uncertainty for each uncertain tax treatment using the method the Group expects to better
predict the resolution of the uncertainty.
*SGVFS169731*
- 26 -
2.22 Earnings Per Share
The Group computes for the basic earnings per share (EPS) by dividing net income for the period
attributable to common shareholders by the weighted average number of common shares outstanding
during the period, after giving retroactive effect to any bonus issue, share split or reverse share split
during the period.
The Group computes for the diluted EPS by dividing the aggregate of net income for the period
attributable to common shareholders by the weighted average number of common shares outstanding
during the period, adjusted for the effects of any dilutive shares.
2.23 Related Party Transactions
Parties are considered to be related if one party has the ability, directly or indirectly, to control the
other party or exercise significant influence over the other party in making financial and operating
decisions. The Group’s related parties include:
 key management personnel, close family members of key management personnel and entities
which are controlled, significantly influenced by or for which significant voting power is held by
key management personnel or their close family members;
 significant investors and their subsidiaries and associates called affiliates;
 subsidiaries, joint ventures and associates and their respective subsidiaries; and
 post-employment benefit plans for the benefit of the Group’s employees.
2.24 Events After the Reporting Date
The Group reflects in the financial statements any post-year-end event that provides additional
information about the Group’s position at the reporting date (adjusting event). The Group discloses
post-year-end events that are not adjusting events, if any, when material to the financial statements.
2.25 Segment Reporting
The Group’s operating businesses are organized and managed separately according to the nature of
the products and services provided, with each segment representing a strategic business unit that
offers different products and serves different markets. Refer to Note 6 for the detailed disclosure on
segment information.
2.26 Fiduciary Activities
The Group excludes from these financial statements the assets and income arising from fiduciary
activities, together with related undertakings to return such assets to customers, where the Group acts
in a fiduciary capacity such as nominee, trustee or agent.
2.27 Future Changes in Accounting Standards
Listed below are accounting standards and interpretations issued but not yet effective up to the date of
issuance of the Group’s financial statements. The Group intends to adopt these standards when they
become effective. Except as otherwise indicated, the Group does not expect the adoption of these
new and amended standards and interpretations to have significant impact on the financial statements.
*SGVFS169731*
- 27 -
Effective beginning on or after January 1, 2023

 Amendments to PAS 1, Presentation of Financial Statements, and PFRS Practice Statement 2,
Disclosure of Accounting Policies
The amendments provide guidance and examples to help entities apply materiality judgments to
accounting policy disclosures. The amendments aim to help entities provide accounting policy
disclosures that are more useful by:
o Replacing the requirement for entities to disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting policies; and
o Adding guidance on how entities apply the concept of materiality in making decisions about
accounting policy disclosures.
The amendments to the Practice Statement provide non-mandatory guidance. Early adoption of
the amendments is permitted as long as this fact is disclosed.
 Amendments to PAS 12, Income Taxes, Deferred Tax Related to Assets and Liabilities arising
from a Single Transaction
The amendments narrow the scope of the initial recognition exception under PAS 12, so that it no
longer applies to transactions that give rise to equal taxable and deductible temporary differences.
The amendments also clarify that where payments that settle a liability are deductible for tax
purposes, it is a matter of judgement (having considered the applicable tax law) whether such
deductions are attributable for tax purposes to the liability recognized in the financial statements
(and interest expense) or to the related asset component (and interest expense). The amendments
apply to transactions that occur on or after the beginning of the earliest comparative period
presented.
 Amendments to PAS 8, Accounting Policies, Changes in Accounting Estimates and Errors,

Definition of Accounting Estimates
The amendments introduce a new definition of accounting estimates and clarify the distinction
between changes in accounting estimates and changes in accounting policies and the correction of
errors. The amendments also clarify that the effects on an accounting estimate of a change in an
input or a change in a measurement technique are changes in accounting estimates if they do not
result from the correction of prior period errors. Early adoption of the amendments is permitted.

 Amendments to PAS 1, Classification of Liabilities as Current or Non-current
The amendments clarify:
o That only covenants with which an entity must comply on or before the reporting date will
affect a liability’s classification as current or non-current;
o That classification is unaffected by the likelihood that an entity will exercise its deferral right;
and
o That only if an embedded derivative in a convertible liability is itself an equity instrument
would the terms of a liability not impact its classification.
The amendments are effective for annual reporting periods beginning on or after January 1, 2024
and must be applied retrospectively. The Group is currently assessing the impact the
amendments will have on its current practice and whether existing loan agreements may require
renegotiation.
*SGVFS169731*
- 28 -
 Amendments to PFRS 16, Lease Liability in a Sale and Leaseback

The amendments specify how a seller-lessee measures the lease liability arising in a sale and
leaseback transaction in a way that it does not recognize any amount of the gain or loss that
relates to the right-of-use retained. The amendments are effective for annual reporting periods
beginning on or after January 1, 2024 and must be applied retrospectively. Earlier adoption is
permitted and that fact must be disclosed.

 PFRS 17, Insurance Contracts
PFRS 17 is a comprehensive new accounting standard for insurance contracts covering
recognition and measurement, presentation and disclosure. Once effective, PFRS 17 will replace
PFRS 4, Insurance Contracts. This new standard on insurance contracts applies to all types of
insurance contracts (i.e., life, non-life, direct insurance and re-insurance), regardless of the type of
entities that issue them, as well as to certain guarantees and financial instruments with
discretionary participation features. A few scope exceptions will apply. The overall objective of
PFRS 17 is to provide an accounting model for insurance contracts that is more useful and
consistent for insurers. In contrast to the requirements in PFRS 4, which are largely based on
grandfathering previous local accounting policies, PFRS 17 provides a comprehensive model for
insurance contracts, covering all relevant accounting aspects.
On December 15, 2021, the FSRSC amended the mandatory effective date of PFRS 17 from
January 1, 2023 to January 1, 2025. This is consistent with Circular Letter No. 2020-62 issued by
the Insurance Commission which deferred the implementation of PFRS 17 by two years after its
effective date as decided by the International Accounting Standards Board (IASB).
PFRS 17 is effective for reporting periods beginning on or after January 1, 2025, with
comparative figures required. Early application is permitted.
Deferred effectivity
 PFRS 10, Consolidated Financial Statements, and PAS 28: Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture (Amendments)
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of
control of a subsidiary that is sold or contributed to an associate or joint venture. The
amendments clarify that a full gain or loss is recognized when a transfer to an associate or joint
venture involves a business as defined in PFRS 3. Any gain or loss resulting from the sale or
contribution of assets that does not constitute a business, however, is recognized only to the
extent of unrelated investors’ interests in the associate or joint venture.
On January 13, 2016, the FSRSC postponed the original effective date of January 1, 2016 of the
said amendments until the IASB has completed its broader review of the research project on
equity accounting that may result in the simplification of accounting for such transactions and of
other aspects of accounting for associates and joint ventures.
3. Significant Accounting Judgments and Estimates
The preparation of the financial statements in compliance with PFRS requires the Group to make
judgments and estimates that affect the reported amounts and disclosures. The Group continually
evaluates judgments and estimates and uses as basis its historical experience and other factors,
including expectations of future events. The Group reflects the effects of any changes in estimates in
the financial statements as they become reasonably determinable.
*SGVFS169731*
- 29 -
3.1 Judgments
3.1.1 Assessment of Control Over a Subsidiary
The Group demonstrates control over an investee when the Group is exposed, or has rights, to
variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Thus, the following elements must all be present to exercise
control over an investee:
 Power over the investee
 Exposure, or rights, to variable returns from its involvement with the investee
 The ability to use its power over the investee to affect the amount of the investor’s returns
The Group considers all facts and circumstances when assessing whether it controls an investee.
In making this assessment, the Group considers the following factors:

 The purpose and design of the investee
 What the relevant activities are and how decisions about those activities are made
 Whether the rights of the Group give it the current ability to direct the relevant activities
 Whether the Group is exposed, or has rights, to variable returns from its involvement with the
investee
 Whether the Group has the ability to use its power over the investee to affect the amount of the
investor’s returns
The assessment of the Group on its control over a subsidiary is further discussed in Note 12.
3.1.2 Assessment of Significant Influence Over an Associate
The Group generally accounts for an investment as an associate when the Group holds 20% or more
of the voting power of the investee company held directly or indirectly through subsidiaries, unless it
can be clearly demonstrated that this is not the case.
In assessing whether the Group exercises significant influence over an investee company, the Group
considers the following factors:
 Representation in the BOD or equivalent governing body of the investee company
 Participation in policy-making processes, including participation in decisions about dividends and
other distributions
 Material transactions between the Group and the investee company
 Interchange of management personnel
 Provision of essential technical performance
The assessment of the Group on its significant influence over an investee company is further
discussed in Note 12.
3.1.3 Classification of Financial Assets
The Group classifies its financial assets depending on the results of the SPPI test and on the business
model used for managing those financial assets.
*SGVFS169731*
- 30 -
When performing the SPPI test, the Group applies judgment and evaluates relevant factors and
characteristics such as the behavior and nature of contractual cash flows, its original currency
denomination, the timing and frequency of interest rate repricing, contingent events that would alter
the amount and/or timing of cash flows, leverage features, prepayment or extension options and other
features that may modify the consideration for the time value of money.
As a second step, the Group performs business model assessment to reflect how financial assets are
managed in order to generate net cash inflows based on the following factors:
 business objectives and strategies for holding the financial assets;
 performance measures and benchmarks being used to evaluate the Group’s key management
personnel accountable to the financial assets;
 risks associated to the financial assets and the tools applied in managing those risks;
 compensation structure of business units, including whether based on fair value changes of the
investments managed or on the generated cash flows from transactions; and
 frequency and timing of disposals.
In applying judgment, the Group also considers the circumstances surrounding the transaction as well
as the prudential requirements of the BSP.
3.1.4 Fair Valuation of Financial Instruments
When the fair values of financial assets and financial liabilities recorded in the statement of financial
position cannot be derived from active markets, the Group uses valuation techniques and
mathematical models. The Group derives the inputs to these models from observable markets where
possible, otherwise, a degree of judgment is required in establishing fair values. The judgments
include considerations of liquidity and model inputs such as correlation and volatility for longer-dated
derivatives. For the valuation of nonmarketable unquoted equity securities, the Group considers a
discount for lack of marketability, which is applied to the values determined by an independent
valuation company (refer to Note 5 for the fair values of financial instruments).
3.1.5 Contingencies
The Group is currently involved in legal proceedings. The estimate of the probable cost for the
resolution of claims has been developed in consultation with the aid of the outside legal counsels
handling the Group’s defense in these matters and is based upon an analysis of potential results.
Management does not believe that the outcome of these matters will affect the results of operations.
It is probable, however, that future results of operations could be materially affected by changes in the
estimates or in the effectiveness of the strategies relating to the proceedings (refer to Note 34).
3.1.6 Determination of Functional Currency
PAS 21, The Effects of Changes in Foreign Exchange Rates, requires the Group to use its judgment to
determine the functional currency of the Group, including its foreign operations, such that it most
faithfully represents the economic effects of the underlying transactions, events and conditions that
are relevant to each entity or reporting unit.
*SGVFS169731*
- 31 -
In making this judgment, the Group considers the following:

 the currency that mainly influences prices for financial instruments and services (this will often
be the currency in which prices for its financial instruments and services are denominated and
settled);
 the currency in which funds from financing activities are generated; and
 the currency in which receipts from operating activities are usually retained.
3.2 Accounting Estimates
3.2.1 Credit Losses on Financial Assets
The Group’s ECL calculations are mainly derived from outputs of complex statistical models and
expert judgment, with a number of underlying assumptions regarding the choice of variable inputs as
well as their independencies. The Group considers the following elements of the ECL models,
among others, as significant accounting judgments and estimates:
 segmentation of the portfolio, where the appropriate ECL approach and/or model is used,
including whether assessments should be done individually or collectively;
 quantitative and qualitative criteria for determining whether there has been SICR as at a given
reporting date and the corresponding transfers between stages;
 determination of expected life of the financial asset and expected recoveries from defaulted
accounts;
 development of ECL models, including the various formulas and the choice of inputs;
 determination of correlations and interdependencies between risk factors, macroeconomic
scenarios and economic inputs, such as inflation, policy rates and collateral values, and the
resulting impact to PDs, LGDs and EADs; and
 selection of forward-looking information and determination of probability-weightings to derive
the ECL.
In response to the changing credit environment due to the protracted COVID-19 pandemic, as well as
the effects of the Russia-Ukraine conflict, rising interest rates, inflation, and other ‘black swan’
events (see further discussion of these events under 3.2.2 Recognition of Deferred Tax Assets) which
may potentially occur, the Group reviews on a monthly basis its loan portfolio, particularly for
accounts that have shown or are beginning to show increases in credit risk. The Group performs
comprehensive review of the default profile of its accounts to determine if there are factors or
indicators not captured in the risk rating model. If there are noted weaknesses in the model, where
possible, the Group recalibrates the parameter estimates to the ECL models to incorporate internal
default experience, as well as most recent available external data affecting each segment of the
Group’s loan portfolio.
Starting April 2020, the Group reviewed the conduct of its impairment assessment and ECL
methodologies. The Group revisited the segmentation of its portfolio based on industry vulnerability
and resiliency assessment. The Group also reassessed the framework for macroeconomic overlay,
incorporating pandemic and other stress scenarios to ensure that changes in economic conditions are
captured in the ECL calculations.
Refer to Note 16 for the details of the carrying value of financial assets subject to ECL and for the
details of the ECL.
*SGVFS169731*
- 32 -
3.2.2 Recognition of Deferred Tax Assets
Deferred tax assets are recognized for all unused tax losses and temporary differences to the extent
that it is probable that future taxable profit will be available against which the losses can be utilized.
Significant management judgment is required to determine the amount of deferred tax assets that can
be recognized, based upon the availability of future taxable income in reference to financial forecast
and tax strategies. The Group takes into consideration the loan portfolio and deposit growth rates.
The Group reassesses its business plan, as well as tax strategies, in the next three to five years,
considering various economic scenarios including recovery outlook and effects on specific industries
and trade of the protracted COVID-19 pandemic, Russia-Ukraine conflict, rising interest rates,
inflation, and other ‘black swan’ events (such as longer lasting supply shock inflation pressure, credit
rating downgrade, deep recession in the USA and Europe, and emergence of a new pandemic).
Refer to Note 30.3 for the carrying amount of recognized and unrecognized deferred tax assets.
3.2.3 Present Value of Retirement Obligation
The Group determines the cost of defined benefit pension plan and other post-employment benefits
using actuarial valuations, which involve making assumptions about discount rates, future salary
increases, mortality rates and employee turnover. Due to the long-term nature of these plans, such
estimates are subject to significant uncertainty. The Group reviews all assumptions at each reporting
date.
The discount rate is based on zero-coupon yield of government bonds with remaining maturity
approximating the estimated average duration of benefit payment. Future salary increases are based
on the Group’s policy considering the prevailing inflation rate. The mortality rate used is based on
publicly available mortality table modified accordingly with estimates of mortality improvements.
The employee turnover is based on the Group’s most recent experience.
The present value of retirement obligation is disclosed in Note 28.
3.2.4 Impairment of Goodwill
The Group conducts an annual review for any impairment in the value of goodwill. Goodwill is
written down for impairment where the recoverable amount is insufficient to support its carrying
value. The recoverable amount of the CGU is determined based on a VIU calculation, which
considers the present value of cash flow projections from financial budgets approved by senior
management and BOD of the Parent Company covering a three-year period. The assumptions used in
the calculation of VIU are sensitive to estimates of future cash flows from business, interest margin,
discount rates, projected long-term growth rates (derived based on the forecast local gross domestic
product) used to extrapolate cash flows beyond the budget period.
Estimating future earnings involves judgment which takes into account past and actual performance
and expected developments in the respective markets and in the overall macro-economic
environment. Similar with its considerations discussed under 3.2.2 Recognition of Deferred Tax
Assets, the Group revisits its business plan and applies judgment to reassess the projections of future
cash flows as of December 31, 2022, considering various economic scenarios and recovery outlook.
The carrying values of the Group’s goodwill, accumulated impairment losses, and key assumptions
used in determining VIU are disclosed in Note 14.3.
*SGVFS169731*
- 33 -
4. Financial Risk Management Objectives and Policies
4.1 Risk Management Framework
The Parent Company’s BOD has overall responsibility for the establishment and oversight of the
Group’s risk management framework. As delegated by the BOD, the Risk Oversight Committee
(ROC) is mandated to set risk appetite, approve frameworks, policies and processes for managing
risk, and accept risks beyond the approval discretion provided to management. The ROC advises on
the overall current and future risk appetite and strategy and assists in overseeing the implementation
of those strategies and business plans by senior management. Details of the Parent Company’s risk
framework are discussed under the Risk Management Disclosure Section of the Parent Company’s
annual report.
The Group’s activities are principally related to the development, delivery, servicing and use of
financial instruments. Risk is inherent in these activities but it is managed through a process of
ongoing identification, measurement and monitoring, subject to risk limits and other controls. This
process of risk management is critical to the Group’s continuing profitability.
The Group defines material risks (at group level) as those risks from any business activity large
enough to threaten the Parent Company’s capital position to drop below its desired level resulting in
either a P
=13.3 billion increase in risk-weighted assets or a =
P1.7 billion reduction in earnings and/or
qualifying capital which translate into a reduction in CAR by 20 basis points (bps).
Resulting from the assessments based on the premise identified above, the Parent Company agrees
and reviews on a regular basis the material risks that need particular focus from all three lines of
defense. For the assessment period 2020-2022, these are based on the following nine (9) material
risks, which are grouped under Pillar 1 and Pillar 2 risks, and shall be covered in the Internal Capital
Adequacy Assessment Process (ICAAP) document and required for monitoring.
Types and definition of each of these risks are discussed hereunder:
Pillar 1 Risks:
1. Credit Risk (includes Counterparty and Country Risks)
2. Market Risk
3. Operational Risk
Pillar 2 Risks:
4. Credit Concentration Risk
5. Interest Rate Risk in Banking Book (IRRBB)
6. Liquidity Risk
7. Reputational / Customer Franchise Risk
8. Strategic Business Risk
9. Cyber Security Risk
The Risk Management Group (RMG) provides the legwork for the ROC in its role of formulating the
risk management strategy, the development and maintenance of the internal risk management
framework, and the definition of the governing risk management principles. The RMG provides
assistance to the Assets and Liabilities Committee (ALCO) on capital management and the Board
Policy Committee on the management of regulatory capital.
*SGVFS169731*
- 34 -
The mandate of the RMG involves:

 Implementing the risk management framework of identifying, measuring, controlling and
monitoring the various risk taking activities of the Group, inherent in all financial institutions;
 Providing services to the risk-taking units and personnel in the implementation of risk mitigation
strategies; and
 Establishing recommended limits based on the results of its analysis of exposures.
4.2 Credit Risk
Credit risk is the non-recovery of credit exposures (on-and-off balance sheet exposures). Managing
credit risk also involves monitoring of migration risk, concentration risk, country risk and settlement
risk. The Group manages its credit risk at various levels (i.e., strategic level, portfolio level down to
individual transaction).
The credit risk management of the entire loan portfolio is under the direct oversight of the ROC and
Executive Committee. Credit risk assessment of individual borrower is performed by the business
sector, remedial sector and credit management sector. Risk management is embedded in the entire
credit process, i.e., from credit origination to remedial management (if needed).
Among the tools used by the Group in identifying, assessing and managing credit risk include:
 Documented credit policies and procedures: sound credit granting process, risk asset acceptance
criteria, target market and approving authorities;
 System for administration and monitoring of exposure;
 Pre-approval review of loan proposals;
 Post approval review of implemented loans;
 Work out system for managing problem credits;
 Regular review of the sufficiency of valuation reserves;
 Monitoring of adequacy of capital for credit risk via the Capital Adequacy Ratio (CAR) report;
 Monitoring of breaches in regulatory and internal limits;
 Credit Risk Management Dashboard;
 Diversification;
 Internal Risk Rating System for corporate accounts;
 Credit Scoring for retail accounts; and
 Active loan portfolio management undertaken to determine the quality of the loan portfolio and
identify: portfolio growth, movement of loan portfolio, adequacy of loan loss reserves, trend of
nonperforming loans (NPLs), and concentration risk (per classified account, per industry, clean
exposure, large exposure, contingent exposure, currency, security, facility, demographic, etc.)
The Group follows the BOD-approved policy on the generic classification of loans based on the type
of borrowers and the purpose of the loan. The loan portfolio is grouped based on the underlying risk
characteristics that are expected to respond in a similar manner to macroeconomic factors and
forward looking conditions.
4.2.1 Credit-Related Commitments
The exposures represent guarantees, standby letters of credit (LCs) issued by the Parent Company and
documentary/commercial LCs which are written undertakings by the Parent Company. To mitigate
this risk, the Parent Company requires hard collaterals for standby LCs lines while commercial LCs
are collateralized by the underlying shipments of goods to which they relate.
*SGVFS169731*
- 35 -
4.2.2 Derivative Financial Instruments
Credit risk arising from derivative financial instruments is, at any time, limited to those with positive
fair values, as recorded in the statement of financial position.
4.2.3 Collateral and Other Credit Enhancements
As a general rule, character is the single most important consideration in granting loans. However,
collaterals are requested to mitigate risk. The loan value and type of collateral required depend on the
assessment of the credit risk of the borrower or counterparty. The Group follows guidelines on the
acceptability of types of collateral and valuation parameters.
The main types of collateral obtained are as follows:

 For corporate accounts - deposit hold-outs, guarantees, securities, physical collaterals (e.g., real
estate, chattels, inventory, etc.); generally, commercial, industrial and residential lots are preferred
 For retail lending - mortgages on residential properties and vehicles financed
 For securities lending and reverse repurchase transactions - cash or securities
The disposal of the foreclosed properties is handled by the Acquired Assets Management Group
which adheres to the general policy of disposing assets at the highest possible market value.
Management regularly monitors the market value of the collateral and requests additional collateral in
accordance with the underlying agreement. The existing market value of the collateral is considered
during the review of the adequacy of the allowance for credit losses. Generally, collateral is not held
over loans and advances to banks except for reverse repurchase agreements. The Group is not
permitted to sell or repledge the collateral held over loans and advances to counterparty banks and
BSP in the absence of default by the owner of the collateral.
4.2.4 Maximum Exposure to Credit Risk After Collateral Held or Other Credit Enhancements
An analysis of the maximum exposure to credit risk after taking into account any collateral held or
other credit enhancements for the Group and the Parent Company is shown below:
Consolidated
2022
Financial
Maximum Fair Value of Net Effect of
Exposure Collateral Exposure Collateral
Securities held under agreements to resell P
=64,523,863 P
=64,334,349 P
=189,514 P
=64,334,349
Loans and receivables:
Receivables from customers*:
Corporates 516,315,998 289,977,781 425,412,218 90,903,780
Local government units (LGU) 2,770,555 − 2,770,555 −
Credit Cards 13,094,453 − 13,094,453 −
Retail small and medium enterprises (SME) 4,735,190 3,594,278 2,821,798 1,913,392
Housing Loans 24,241,178 37,042,606 7,118,628 17,122,550
Auto Loans 5,570,015 11,420,518 1,765,068 3,804,947
Others 11,392,943 4,991,456 8,436,551 2,956,392
Other receivables 14,979,583 − 14,979,583 −
P
=657,623,778 P
=411,360,988 P
=476,588,368 P
=181,035,410
*Receivables from customers exclude residual value of the leased asset (Note 10).
*SGVFS169731*
- 36 -
Consolidated
2021
Financial
Securities held under agreements to resell =15,796,673
P =15,800,317
P =–
P =15,796,673
P
Receivables from customers*:
Corporates 527,718,995 247,961,955 429,891,939 97,827,056
Local government units (LGU) 4,241,018 − 4,241,018 −
Credit Cards 10,749,018 − 10,749,018 −
Retail SME 7,522,925 6,971,613 5,715,786 1,807,139
Housing Loans 27,484,803 7,263,711 25,913,056 1,571,747
Auto Loans 7,286,027 6,738,811 3,945,861 3,340,166
Others 7,887,441 7,710,970 6,631,679 1,255,762
=622,025,558
P =292,447,377
P =500,427,015
P =121,598,543
P
*Receivables from customers exclude residual value of the leased asset (Note 10).
Parent Company
2022
Financial
Securities held under agreements to resell P
=64,523,863 P
=64,334,349 P
=189,514 P
=64,334,349
Receivables from customers:
Corporates 504,070,752 268,623,811 424,982,412 79,088,340
LGU 2,770,555 − 2,770,555 −
Credit Cards 13,094,453 − 13,094,453 −
Retail SME 3,936,250 2,483,707 2,672,892 1,263,358
Housing Loans 23,326,606 35,629,579 7,118,628 16,207,978
Auto Loans 5,570,015 11,420,518 1,765,068 3,804,947
Others 11,300,587 4,802,742 8,436,552 2,864,035
P
=642,518,881 P
=387,294,706 P
=474,955,874 P
=167,563,007
Parent Company
2021
Financial
Securities held under agreements to resell =15,796,673
P =15,800,317
P =–
P =15,796,673
P
Corporates 517,966,207 246,894,007 429,891,939 88,074,268
LGU 4,241,018 − 4,241,018 −
Credit Cards 10,749,018 − 10,749,018 −
Retail SME 5,750,965 3,714,598 5,715,786 35,179
Housing Loans 26,607,300 5,982,154 25,913,056 694,244
Auto Loans 7,286,027 6,738,811 3,945,861 3,340,166
Others 6,420,782 7,494,006 6,242,747 178,035
=608,295,434
P =286,623,893
P =500,176,869
P =108,118,565
P
The maximum credit risk, without taking into account the fair value of any collateral and netting
agreements, is limited to the amounts on the statement of financial position plus commitments to
customers such as unused commercial letters of credit, outstanding guarantees and others.
*SGVFS169731*
- 37 -
4.2.5 Credit Risk Concentrations
Credit risk concentrations can arise whenever a significant number of borrowers have similar
characteristics. The Group analyzes the credit risk concentration to an individual borrower, related
group of accounts, industry, geographic, internal rating buckets, currency, term and security. For risk
concentration monitoring purposes, the financial assets are broadly categorized into (1) loans and
receivables and (2) trading and investment securities. To mitigate risk concentration, the Group
constantly checks for breaches in regulatory and internal limits. Clear escalation process and override
procedures are in place, whereby any excess in limits are covered by appropriate approving authority
to regularize and monitor breaches in limits.
Limit per client or counterparty

For each CRR, the Parent Company sets limits per client or counterparty based on the regulatory
Single Borrowers Limit. For trading and investment securities, the Group limits investments to
government issues and securities issued by entities with high-quality investment ratings.
Geographic concentration
The table below shows the credit risk exposures, before taking into account any collateral held or
other credit enhancements, categorized by geographic location:
Consolidated
2022
Trading and Other
Loans and investment financial
receivables* securities assets** Total
Philippines P
=552,755,901 P
=237,143,001 P
=120,952,612 P
=910,851,514
Asia (excluding the Philippines) 26,641,314 21,914,099 36,745,688 85,301,101
United Kingdom 2,096,234 6,708,736 22,039,442 30,844,412
USA and Canada 8,707,036 8,378,067 13,190,193 30,275,296
Other European Union Countries 2,079,196 – 8,654,970 10,734,166
Middle East 66,026 1,854,783 10,145 1,930,954
Oceania 523,802 – 2,788 526,590
P
=592,869,509 P
=275,998,686 P
=201,595,838 P
=1,070,464,033
*Loans and receivables exclude residual value of the leased asset (Note 10)
** Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans
receivable’, ‘Securities held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15)
Consolidated
2021
Trading and Other
receivables* securities assets** Total
Philippines =556,478,910
P =200,906,568
P =176,809,453
P P934,194,931
=
USA and Canada 8,201,937 18,728,426 16,566,107 43,496,470
United Kingdom 1,820,209 5,318,234 2,476,726 9,615,169
Other European Union Countries 8,356,214 20,757 1,062,066 9,439,037
Middle East 924,033 – 144,953 1,068,986
Oceania 668,423 – 3,323 671,746
=606,228,885
P =268,610,790
P =236,276,778
P =1,111,116,453
P
*Loans and receivables exclude residual value of the leased asset. (Note 10)
** Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans
receivable’, ‘Securities held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15)
*SGVFS169731*
- 38 -
Parent Company
2022
Trading and Other
receivables securities assets* Total
Philippines P
=550,597,430 P
=236,170,294 P
=122,538,534 P
=909,306,258
United Kingdom 2,091,414 6,554,432 21,273,903 29,919,749
USA and Canada 8,624,015 8,238,785 12,349,620 29,212,420
Other European Union Countries 2,079,196 – 7,132,780 9,211,976
Middle East 66,026 1,854,783 9,567 1,930,376
Oceania 523,797 – – 523,797
P
=577,995,018 P
=274,730,270 P
=191,610,800 P
=1,044,336,088
*Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable’, ‘Securities
held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15)
Parent Company
2021
Trading and Other
receivables securities assets* Total
Philippines =554,890,216
P =200,470,439
P =178,478,647
P =933,839,302
P
USA and Canada 8,139,898 18,600,477 14,972,087 41,712,462
United Kingdom 8,356,214 5,159,055 1,723,570 15,238,839
Other European Union Countries 1,818,298 20,757 1,033,728 2,872,783
Middle East 924,033 – 144,953 1,068,986
Oceania 668,420 – – 668,420
=592,498,761
P =267,884,522
P =226,554,682
P =1,086,937,965
P
*Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable’, ‘Securities
held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15)
Concentration by industry
The tables below show the industry sector analysis of financial assets at amounts before taking into
account the fair value of the loan collateral held or other credit enhancements.
Consolidated
2022
Trading and Other
receivables* securities assets*** Total
Primary target industry:
Financial intermediaries P
=119,769,773 P
=19,521,101 P
=73,230,975 P
=212,521,849
Wholesale and retail 87,945,351 – – 87,945,351
Electricity, gas and water 77,714,165 9,306,111 – 87,020,276
Manufacturing 59,847,311 166,728 – 60,014,039
Transport, storage and
communication 40,563,305 – 50 40,563,355
Agriculture, hunting and forestry 5,192,944 – – 5,192,944
Public administration and defense 1,626,592 – – 1,626,592
Secondary target industry:
Government 2,794,558 196,640,202 127,597,960 327,032,720
Real estate, renting and business
activities 92,957,909 14,283,283 13,884 107,255,076
Construction 27,005,540 – – 27,005,540
Others** 77,452,061 36,081,261 752,969 114,286,291
P
=592,869,509 P
=275,998,686 P
=201,595,838 P
=1,070,464,033
**Others include the following sectors - Other community, social and personal services, private household, hotel and restaurant, education,
mining and quarrying, and health and social work.
***Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable’,
‘Securities held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15)
*SGVFS169731*
- 39 -
Consolidated
2021
Trading and Other
receivables* securities assets*** Total
Financial intermediaries =126,158,573
P =43,483,287
P =53,561,402
P =223,203,262
P
communication 51,693,269 4,045 – 51,697,314
Manufacturing 46,914,627 129,678 – 47,044,305
Government 4,240,406 159,000,735 182,319,161 345,560,302
activities 95,267,868 13,729,541 – 108,997,409
Construction 26,281,431 – – 26,281,431
Others** 82,133,223 41,960,509 396,215 124,489,947
=606,228,885
P =268,610,790
P =236,276,778
P =1,111,116,453
P
**Others include the following sectors - Other community, social and personal services, private household, hotel and restaurant, education,
***Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable’,
‘Securities held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15)
Parent Company
2022
Trading and Other
receivables securities assets** Total
Financial intermediaries P
=119,250,013 P
=19,518,028 P
=63,259,871 P
=202,027,912
Manufacturing 57,490,538 164,780 – 57,655,318
communication 39,696,751 – – 39,696,751
Government 2,770,555 196,519,177 127,597,960 326,887,692
activities 89,266,907 13,141,082 – 102,407,989
Construction 26,938,899 – – 26,938,899
Others* 75,835,586 36,081,092 752,969 112,669,647
P
=577,995,018 P
=274,730,270 P
=191,610,800 =
P1,044,336,088
*Others include the following sectors - Other community, social and personal services, private household, hotel and restaurant, education,
**Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable’,
‘Securities held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15).
*SGVFS169731*
- 40 -
Parent Company
2021
Trading and Other
receivables securities assets** Total
Financial intermediaries =126,812,309
P =43,479,276
P =43,973,406
P =214,264,991
P
communication 50,883,391 – – 50,883,391
Manufacturing 43,338,986 129,678 – 43,468,664
Government 4,240,406 158,886,167 182,319,161 345,445,734
activities 91,680,656 13,126,066 – 104,806,722
Construction 26,020,918 – – 26,020,918
Others* 80,502,881 41,960,340 262,115 122,725,336
=592,498,761
P =267,884,522
P =226,554,682
P =1,086,937,965
P
*Others include the following sectors - Other community, social and personal services, private household, hotel and restaurant, education,
**Other financial assets include the following financial assets: ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable’,
‘Securities held under agreements to resell’, and other financial assets booked under ‘Other assets’ (Note 15).
The internal limit of the Parent Company based on the Philippine Standard Industry Classification
sub-industry is 12.00% for priority industry, 8.00% for regular industry, 30.00% for power industry
and 25.00% for activities of holding companies versus total loan portfolio.
4.2.6 Credit Quality Per Class of Financial Assets
Loans and receivables

The segmentation of the Group’s loan portfolio is based on the underlying risk characteristics that are
expected to respond in a similar manner to macroeconomic factors and forward-looking conditions.
Generally, the Group’s exposures can be categorized as either of the following:

 Non-Retail Portfolio – consists of debt obligations of sovereigns, financial institutions,
corporations, partnerships, or proprietorships. In particular, the Group’s Non-Retail Portfolio
segments are as follows: Sovereigns, Financial Institutions, Specialized Lending (e.g., Project
Finance), Large Corporates, Middle Market and Commercial SME, government-owned and
controlled corporations and LGUs.
 Retail Portfolio – consists of exposures to individual person/s or to a small business, and are not
usually managed on an individual basis but as groups of exposures with similar credit risk
characteristics. This includes Credit Cards, Consumer Loans and Retail SME, among others.
The credit quality of the Non-Retail Portfolio is evaluated and monitored using external ratings and
internal credit risk rating system. The Parent Company maintains a two-dimensional risk rating
structure: that is, there is a borrower risk rating (BRR) and a facility risk rating (FRR).
The Group developed specific borrower rating models to capture specific and unique risk
characteristics of each of the Non-Retail Portfolio segments. The BRR is measured based on
financial condition of the borrower combined with an assessment of non-financial factors such as
management, industry outlook and market competition. The BRR models captures overlays and early
warning signals as well. The Group uses a single scale with 26 risk grades for all its BRR models.
The 26-risk grade internal default masterscale is a representation of a common measure of relative
*SGVFS169731*
- 41 -
default risk associated with the obligors/counterparties. The internal default masterscale is mapped to
a global rating scale.
FRR, on the other hand, assesses potential loss of the Group in case of default, which considers
collateral type and level of collateralization of the facility. The FRR has 9 grades, i.e. FRR A to
FRR I.
The CRR or final credit risk rating shall be expressed in alphanumeric terms, e.g. CRR 1A which is a
combination of the general creditworthiness of the borrower (BRR 1) and the potential loss of the
Group in the event of the borrower’s default (FRR A).
The credit quality and corresponding BRRs of the Group’s receivables from customers are defined
below:
Credit quality 26-Grade BRR system

High BRR 1 Excellent
Borrower has an exceptionally strong capacity to meet its financial commitments. No existing
S&P Equivalent Global Rating: disruptions or future disruptions are highly unlikely. Probability of going into default in the coming
AAA to BBB- year is very minimal/low.
BRR 2 Very Strong

Borrower has a very strong capacity to meet its financial commitments. No existing disruptions or
future disruptions are unlikely. It differs from BRR 1 borrowers only to a small degree. Probability
of going into default in the coming year is very minimal/low.
BRR 3 Strong
Borrower has a strong capacity to meet its financial commitments. No existing disruptions or future
disruptions are unlikely. However, adverse economic conditions or changing circumstances could
lead to somewhat lesser capacity to meet financial obligations than in higher-rated borrowers.
Probability of going into default in the coming year is very minimal/low.
BRR 4-6 Good

Borrower has an adequate capacity to meet its financial commitments in the normal course of its
business. With identified disruptions from external factors but company has or will likely overcome.
Default possibility is minimal/low.
BRR 7-9 Satisfactory

Borrower under this rating scale basically possesses the characteristics of borrowers rated as BRR 4
to BRR 6 with slightly lesser quality. Default possibility is minimal/low.
BRR 10-12 Adequate

Borrower has an adequate capacity to meet its financial commitments under the normal course of
business. However, adverse economic conditions and changing circumstances are more likely to
weaken the borrower's capacity to meet its financial commitments. Default possibility is
minimal/low.
Standard BRR 13-15 Average

Borrower still has the capacity to meet its financial commitments and withstand normal business
S&P Equivalent Global Rating: cycles, however, any prolonged unfavorable economic and/or market conditions would create an
BB+ to BB- immediate deterioration beyond acceptable levels. With identified disruptions from external forces,
impact on the borrower is uncertain. Default is a possibility.
BRR 16-18 Acceptable

Borrower under this rating scale basically possesses the characteristics of borrowers rated as
BRR 13 to BRR 15 with slightly lesser quality. Default is a possibility.
BRR 19-20 Vulnerable

Borrower is less vulnerable in the near term than other low-rated borrowers. However, it faces
major ongoing uncertainties and exposure to adverse business, financial or economic conditions that
could lead to the borrower's inadequate capacity to meet its financial commitment. Default is a
possibility
*SGVFS169731*
- 42 -
Credit quality 26-Grade BRR system

Substandard BRR 21-22 Weak
Borrower is more vulnerable than the borrowers rated BRR 19 and BRR 20 but the borrower
S&P Equivalent Global Rating: currently has the capacity to meet its financial commitments. Adverse business, financial, or
B+ to CCC- economic conditions will likely impair the borrower’s capacity or willingness to meet its financial
commitments. Default is more than a possibility.
BRR 23-25 Watchlist

Borrower is currently vulnerable and is dependent upon favorable business, financial, and economic
conditions to meet its financial commitments. Borrower may already be experiencing losses and
impaired capital in the case of BRR 25.
Impaired BRR 26 Default

Default will be a general default. Borrower will fail to pay all or substantially all of its obligations
S&P Equivalent Global Rating: as they come due.
D
For the Retail Portfolio, such as Retail SME, Credit Cards, Housing and Auto Loans, credit scoring is
being used in evaluating the creditworthiness of the borrower.
The table below shows the credit quality of the Group’s and the Parent Company’s receivables from
customers, gross of allowance for credit losses and unearned and other deferred income, but net of
residual values of leased assets, as of December 31, 2022 and 2021:
Consolidated
2022
Stage 1 Stage 2 Stage 3 Total
Subject to CRR
Non-Retail – Corporate
High P
=210,563,413 P
=− P
=– P
=210,563,413
Standard 198,909,684 30,731,562 − 229,641,246
Substandard 29,953,399 31,163,671 − 61,117,070
Impaired − − 26,950,431 26,950,431
439,426,496 61,895,233 26,950,431 528,272,160
Subject to Scoring and Unrated
Non-Retail 2,849,194 11,760,556 1,183,962 15,793,712
Corporate 95,980 11,723,793 1,118,268 12,938,041
LGU 2,753,214 36,763 65,694 2,855,671
Retail 41,072,586 1,411,135 13,920,882 56,404,603
Auto Loans 4,955,770 102,179 1,970,279 7,028,228
Housing Loans 18,930,297 643,627 9,015,408 28,589,332
Retail SME 4,029,128 349,415 2,025,819 6,404,362
Credit Card 13,157,391 315,914 909,376 14,382,681
Others 9,376,862 1,546,960 1,987,431 12,911,253
53,298,642 14,718,651 17,092,275 85,109,568
P
=492,725,138 P
=76,613,884 P
=44,042,706 P
=613,381,728
Consolidated
2021
Subject to CRR
Non-Retail – Corporate
High P213,838,798
= =–
P P–
= P213,838,798
=
Standard 212,873,427 3,844,270 − 216,717,697
Substandard 40,871,799 21,006,283 − 61,878,082
Impaired − − 53,190,550 53,190,550
467,584,024 24,850,553 53,190,550 545,625,127
(Forward)
*SGVFS169731*
- 43 -
Consolidated
2021
Non-Retail =10,135,795
P P157,989
= P2,366,325
= =12,660,109
P
Corporate 5,919,463 109,747 2,298,527 8,327,737
LGU 4,216,332 48,242 67,798 4,332,372
Retail 42,972,853 1,081,229 18,382,820 62,436,902
Auto Loans 5,942,501 162,915 2,733,492 8,838,908
Housing Loans 20,002,043 486,743 10,428,593 30,917,379
Retail SME 6,559,372 162,158 2,802,140 9,523,670
Credit Card 10,468,937 269,413 2,418,595 13,156,945
Others 7,520,493 377,111 1,197,669 9,095,273
60,629,141 1,616,329 21,946,814 84,192,284
=528,213,165
P =26,466,882
P =75,137,364
P =629,817,411
P
Parent Company
2022
Subject to CRR
Non-Retail - Corporate
High P
=208,384,303 P
=– P
=– P
=208,384,303
Standard 189,504,524 30,731,541 – 220,236,065
Substandard 29,953,399 31,143,373 – 61,096,772
Impaired – – 27,951,509 27,951,509
427,842,226 61,874,914 27,951,509 517,668,649
Non-Retail 2,759,254 11,758,770 1,099,592 15,617,616
Corporate 6,040 11,722,007 1,033,898 12,761,945
LGU 2,753,214 36,763 65,694 2,855,671
Retail 39,685,909 1,376,404 12,960,913 54,023,226
Auto Loans 4,955,770 102,179 1,970,279 7,028,228
Housing Loans 18,020,708 640,238 9,002,446 27,663,392
Retail SME 3,552,040 318,073 1,078,812 4,948,925
Credit Card 13,157,391 315,914 909,376 14,382,681
Others 9,284,464 1,546,960 1,987,432 12,818,856
51,729,627 14,682,134 16,047,937 82,459,698
P
=479,571,853 P
=76,557,048 P
=43,999,446 P
=600,128,347
Parent Company
2021
Subject to CRR
Non-Retail - Corporate
High =212,114,805
P =–
P P–
= P212,114,805
=
Standard 206,430,322 3,776,903 – 210,207,225
Substandard 40,763,415 20,989,666 – 61,753,081
Impaired – – 52,982,964 52,982,964
459,308,542 24,766,569 52,982,964 537,058,075
Non-Retail 10,135,795 157,989 2,366,325 12,660,109
Corporate 5,919,463 109,747 2,298,527 8,327,737
LGU 4,216,332 48,242 67,798 4,332,372
Retail 40,728,876 972,564 16,728,621 58,430,061
Auto Loans 5,942,501 162,915 2,733,492 8,838,908
Housing Loans 19,117,763 486,743 10,417,573 30,022,079
Retail SME 5,199,675 53,493 1,158,961 6,412,129
Credit Card 10,468,937 269,413 2,418,595 13,156,945
Others 6,067,892 374,035 1,173,741 7,615,668
56,932,563 1,504,588 20,268,687 78,705,838
=516,241,105
P =26,271,157
P =73,251,651
P =615,763,913
P
*SGVFS169731*
- 44 -
The analysis of past due status of receivables from customers that are subject to scoring and unrated
follows:
Consolidated
2022
Less than More than
30 days 31 to 90 days 91 to 180 days 180 days Total
Housing Loans P
=297,214 P
=599,308 P
=595,871 P
=8,202,270 P
=9,694,663
Auto Loans 60,850 74,690 65,801 1,869,429 2,070,770
Retail SME 61,162 21,090 47,949 1,814,702 1,944,903
Credit Card 1,455 102,596 233,163 630,629 967,843
LGU 7,650 – – 58,044 65,694
Others 719,429 108,294 49,980 1,254,343 2,132,046
Total P
=1,147,760 P
=905,978 P
=992,764 P
=13,829,417 P
=16,875,919
Consolidated
2021
Less than More than
Housing Loans =463,159
P =365,760
P =798,478
P =9,453,732
P =11,081,129
P
Auto Loans 106,552 111,726 179,743 2,499,658 2,897,679
Retail SME 292,832 147,427 72,810 965,495 1,478,564
Credit Card 2,338 76,839 263,944 2,092,666 2,435,787
LGU – – – 24,916 24,916
Others 247,220 107,395 111,504 1,542,905 2,009,024
Total =1,112,101
P =809,147
P =1,426,479
P =16,579,372
P =19,927,099
P
Parent Company
2022
Less than More than
Housing Loans P
=296,922 P
=594,491 P
=566,398 P
=8,176,282 P
=9,634,093
Auto Loans 60,850 74,690 65,801 1,869,429 2,070,770
Retail SME 61,162 15,774 37,869 968,460 1,083,265
Credit Card 1,455 102,596 233,163 630,629 967,843
LGU 7,650 – – 58,044 65,694
Others 712,413 107,503 38,672 1,163,289 2,021,877
Total P
=1,140,452 P
=895,054 P
=941,903 P
=12,866,133 P
=15,843,542
Parent Company
2021
Less than More than
Housing Loans =352,533
P =361,041
P =794,227
P =9,403,925
P =10,911,726
P
Auto Loans 106,552 111,726 179,743 2,499,658 2,897,679
Retail SME 197,544 133,337 70,980 797,201 1,199,062
Credit Card 2,338 76,839 263,944 2,092,666 2,435,787
LGU – – – 24,916 24,916
Others 231,381 103,750 98,761 1,542,905 1,976,797
Total =890,348
P =786,693
P =1,407,655
P =16,361,271
P =19,445,967
P
Trading and investment securities and other financial assets

In ensuring quality investment portfolio, the Group uses the credit risk rating based on the external
ratings of eligible external credit rating institutions (i.e. Moody’s Investors Service) as follows:
 Aaa to Aa3 - fixed income are judged to be of high quality and are subject to very low credit risk,
but their susceptibility to long-term risks appears somewhat greater.
*SGVFS169731*
- 45 -
 A1 to A3 - fixed income obligations are considered upper-medium grade and are subject to low
credit risk, but have elements present that suggest a susceptibility to impairment over the long
term.
 Baa1 and below - represents those investments which fall under any of the following grade:
o Baa1, Baa2, Baa3 - fixed income obligations are subject to moderate credit risk. They are
considered medium grade and as such protective elements may be lacking or may be
characteristically unreliable.
o Ba1, Ba2, Ba3 - obligations are judged to have speculative elements and are subject to
substantial credit risk.
o B1, B2, B3 - obligations are considered speculative and are subject to high credit risk.
o Caa1, Caa2, Caa3 - are judged to be of poor standing and are subject to very high credit risk.
o Ca - are highly speculative and are likely in, or very near, default, with some prospect of
recovery of principal and interest.
o C - are the lowest rated class of bonds and are typically in default, with little prospect for
recovery of principal or interest.
Below are the financial assets of the Group and the Parent Company, gross of allowance for credit
losses, excluding receivables from customers, which are monitored using external ratings.
Consolidated
2022
Baa1 and
Aaa to Aa3 A1 to A3 below Subtotal Unrated Total
Due from BSP 1/ =−
P =−
P =−
P =−
P P
= 94,701,360 P
= 94,701,360
Interbank loans receivables 1,570,626 2,684,871 − 4,255,497 12,035,973 16,291,470
Securities held under agreements to resell − 21,206,949 17,234,682 38,441,631 26,084,420 64,526,051
Government securities 3,309,749 553,668 114,076,366 117,939,783 − 117,939,783
Private debt securities 590,542 251,592 159,681 1,001,815 14,429,055 15,430,870
Quoted equity securities − − 58,170 58,170 734,046 792,216
Unquoted equity securities − − 388,884 388,884 23,631,772 24,020,656
Investment securities at amortized cost
Government securities 145,147 7,950,608 69,892,792 77,988,547 208,886 78,197,433
Private debt securities − 8,876,965 1,158,512 10,035,477 26,082,900 36,118,377
Loans and receivables - Others 2/ − − − − 19,188,611 19,188,611
1/
‘Due from BSP’ is composed of interest-earning short-term placements with the BSP and a demand deposit account to support the regular operations of the Parent Company.
2/
Loans and receivables - Others is composed of Accrued interest receivable, Accounts receivable, Sales contracts receivable and other miscellaneous receivables (Note 10).
Consolidated
2021
Baa1 and
P =−
P =−
P =− P
P =161,001,912 P
=161,001,912
Interbank loans receivables 1,839,737 24,081,833 1,223,976 27,145,546 4,967,121 32,112,667
Securities held under agreements to resell − − − − 15,800,317 15,800,317
Government securities 6,881,673 2,789,153 110,623,588 120,294,414 159,179 120,453,593
Private debt securities 577,330 − 590,387 1,167,717 21,947,762 23,115,479
Quoted equity securities − − 48,170 48,170 621,415 669,585
Unquoted equity securities − − 406,151 406,151 23,342,482 23,748,633
Government securities 127,949 200,705 33,747,889 34,076,543 56,751 34,133,294
Private debt securities 670,407 26,131,022 2,804,403 29,605,832 29,538,883 59,144,715
1/
2/
*SGVFS169731*
- 46 -
Parent Company
2022
Baa1 and
P =−
P =−
P =−
P P
= 94,701,360 P
= 94,701,360
Due from other banks 961,707 15,816,731 154,079 16,932,517 676,730 17,609,247
Interbank loans receivables − 2,684,871 0 2,684,871 12,051,241 14,736,112
Securities held under agreements to resell − 21,206,949 17,234,682 38,441,631 26,084,420 64,526,051
Government securities 2,938,253 553,668 114,168,823 117,660,744 − 117,660,744
Private debt securities 590,542 68 159,681 750,291 14,429,054 15,179,345
Quoted equity securities − − − − 734,046 734,046
Unquoted equity securities − − − − 23,631,772 23,631,772
Government securities 5,865 7,950,608 69,892,792 77,849,265 208,886 78,058,151
Private securities − 8,876,965 1,158,512 10,035,477 26,082,900 36,118,377
1/
2/
Parent Company
2021
Baa1 and
P =−
P =−
P =− P
P =161,001,912 P
=161,001,912
Due from other banks 895,156 16,724,931 130,917 17,751,004 1,582,869 19,333,873
Interbank loans receivables − 24,081,833 1,223,976 25,305,809 4,996,525 30,302,334
Securities held under agreements to resell − − − − 15,800,317 15,800,317
Government securities 6,881,673 2,789,153 110,796,148 120,466,974 − 120,466,974
Private debt securities 577,330 − 590,387 1,167,717 21,947,762 23,115,479
Quoted equity securities − − − − 621,415 621,415
Unquoted equity securities − − − − 23,342,482 23,342,482
Government securities − 200,705 33,747,889 33,948,594 56,751 34,005,345
Private securities 670,407 26,131,022 2,804,403 29,605,832 29,538,883 59,144,715
1/
2/
4.3 Liquidity Risk and Funding Management
Liquidity risk is generally defined as the current and prospective risk to earnings or capital arising
from the Group’s inability to meet its obligations when they come due without incurring unacceptable
losses or costs.
The Group’s liquidity management involves maintaining funding capacity to accommodate

fluctuations in asset and liability levels due to changes in the Group’s business operations or
unanticipated events created by customer behavior or capital market conditions. The Parent
Company seeks to ensure liquidity through a combination of active management of liabilities, a liquid
asset portfolio composed substantially of deposits in primary and secondary reserves, and the
securing of money market lines and the maintenance of repurchase facilities to address any
unexpected liquidity situations.
Liquidity risk is monitored and controlled primarily by a gap analysis of maturities of relevant assets
and liabilities reflected in the maximum cumulative outflow (MCO) report, as well as an analysis of
available liquid assets. The MCO focuses on a 12-month period wherein the 12-month cumulative
outflow is compared to the acceptable MCO limit set by the BOD. Furthermore, an internal liquidity
ratio has been set to determine sufficiency of liquid assets over deposit liabilities.
*SGVFS169731*
- 47 -
Liquidity is monitored by the Parent Company on a daily basis through the Global Markets Group.
Likewise, the RMG monitors the static liquidity via the MCO under normal and stressed scenarios.
The table below shows the liquidity information of financial assets and financial liabilities which
includes coupon cash flows categorized based on the expected date on which the asset will be realized
and the liability will be settled. For other assets, the analysis into maturity grouping is based on the
remaining period from the end of the reporting period to the contractual maturity date or if earlier, the
expected date the assets will be realized.
Consolidated
2022
More than More than More than
Up to 1 1 Month to 3 Months to 6 Months to Beyond
Month 3 Months 6 Months 1 Year 1 year Total
Financial Assets
COCI = 22,217,915
P =–
P =–
P =–
P =–
P P22,217,915
=
Due from BSP and other banks 125,113,662 – – – – 125,113,662
Interbank loans receivable 8,876,452 1,313,106 2,441,537 4,108,738 – 16,739,833
Securities held under agreements to resell 60,878,039 3,784,201 – – – 64,662,240
Financial assets at FVTPL:
Government securities 199,530 1,080,139 296,110 1,053,949 6,650,083 9,279,811
Private debt securities 12,016 20,983 18,250 51,248 3,224,192 3,326,689
Equity securities 2,898 – – – – 2,898
Derivative assets:
Gross contractual receivable 40,036,455 7,664,954 10,332,430 3,259,807 15,337 61,308,983
Gross contractual payable (39,050,764) (7,542,887) (10,098,003) (3,240,344) – (59,931,998)
Financial assets at FVOCI:
Government securities 87,743,403 3,614,649 9,339,616 9,486,786 141,544,530 251,728,984
Private debt securities 3,417,893 1,165,367 283,912 2,883,129 42,342,083 50,092,384
Equity securities 1,614,229 – – – 23,198,643 24,812,872
Private debt securities 1,243,241 6,416,993 11,655,875 10,450,844 37,189,899 66,956,852
Financial assets at amortized cost:
Receivables from customers 95,928,952 75,907,926 32,255,624 14,027,383 528,529,464 746,649,349
Other receivables 7,226,808 903,926 1,587,116 786,924 8,683,837 19,188,611
Other assets 50,539 – – 792 19,000 70,331
Total financial assets P421,554,976
= = 104,363,433
P = 64,830,171
P = 45,704,669
P = 940,610,209 P
P = 1,577,063,458
Financial Liabilities
Deposit liabilities:
Demand = 222,499,667
P =–
P =–
P =–
P =–
P = 222,499,667
P
Savings * 359,730,732 – – – – 359,730,732
Time and LTNCDs * 138,445,541 96,585,595 26,246,991 16,416,245 21,787,715 299,482,087
Financial liabilities at FVTPL:
Derivative liabilities:
Gross contractual payable 27,156,350 38,707,232 17,167,707 557,813 – 83,589,102
Gross contractual receivable (26,737,134) (38,304,103) (16,951,759) (556,330) – (82,549,326)
Bills and acceptances payable 8,334,542 3,571,275 30,000 43,936 3,145,035 15,124,788
Bonds payable – – 17,771,674 685,787 42,883,029 61,340,490
Accrued interest payable and accrued
other expenses payable 2,996,291 146,218 167,140 59,077 480,280 3,849,006
Other liabilities 6,529,727 481,672 443,923 982,544 1,784,517 10,222,383
Total financial liabilities = 738,955,716
P P
= 101,187,889 = 44,875,676
P = 18,189,072
P = 70,080,576
P P
= 973,288,929
* High-yield savings accounts are included under time deposits
Consolidated
2021
Financial Assets
COCI P27,552,773
= =–
P =–
P =–
P =–
P P27,552,773
=
Interbank loans receivable 19,805,605 10,715,908 1,067,495 568,146 – 32,157,154
Securities held under agreements to resell 15,802,951 – – – – 15,802,951
Government securities 57,054 18,448 34,500 11,385,854 4,781,166 16,277,022
Equity securities 5,045 – – – – 5,045
(Forward)
*SGVFS169731*
- 48 -
Consolidated
2021
Derivative assets:
Gross contractual receivable P61,532,251
= P14,897,286
= P7,910,369
= P4,589,910
= =13,210
P P88,943,026
=
Private debt securities 3,444,954 1,412,324 8,989,090 854,325 45,106,745 59,807,438
Equity securities – 7,542 8,062 23,005,580 1,749,225 24,770,409
Government securities 6,361,591 214,959 6,969,499 6,158,380 54,935,808 74,640,237
Other receivables 5,775,560 193,692 749,201 163,276 9,785,849 16,667,578
Other assets 135,528 – – 796 13,698 150,022
Total financial assets =452,786,996
P =98,785,798
P =92,753,812
P =96,158,966
P =
P859,686,494 =P1,600,172,066
Demand =219,090,952
P =–
P =–
P =–
P =–
P =
P219,090,952
Savings * 332,014,541 – – – – 332,014,541
Time and LTNCDs * 184,257,674 98,415,142 19,409,706 22,530,166 30,400,359 355,013,047
Gross contractual payable 20,905,000 30,667,331 17,594,662 254,995 – 69,421,988
Gross contractual receivable (20,620,440) (30,260,033) (17,395,227) (254,871) – (68,530,571)
Bills and acceptances payable 35,960,884 12,411,424 1,155,713 2,419,107 1,038,240 52,985,368
Bonds payable – – 952,406 952,406 55,263,239 57,168,051
Other liabilities 6,022,785 1,091,687 276,512 313,888 2,388,506 10,093,378
Total financial liabilities =779,012,254
P P
=112,745,312 =22,433,256
P =26,290,564
P =89,512,010 P
P =1,029,993,396
Parent Company
2022
Financial Assets
COCI = 22,103,095
P =–
P =–
P =–
P =−
P P22,103,095
=
Interbank loans receivable 8,343,252 515,186 2,202,032 4,108,738 – 15,169,208
Securities held under agreements to resell 60,878,039 3,784,201 – – – 64,662,240
Government securities 199,530 1,080,139 296,110 1,053,949 6,650,083 9,279,811
Equity securities – – – – – –
Derivative assets:
Private debt securities 3,417,893 1,161,551 279,351 805,777 42,009,216 47,673,788
Equity securities 1,167,175 – – 23,198,643 24,365,818
Investment securities at amortized cost:
Other receivables 6,061,538 884,433 1,524,007 780,377 8,674,736 17,925,091
Other assets 49,981 – – – 1,479 51,460
= P
= 100,506,227 = 62,665,891
P = 41,887,327
P P
= 935,284,283 P
= 1,541,643,403
Demand = 221,728,550
P =–
P =–
P =–
P =−
P =
P221,728,550
Savings * 358,566,639 – – – – 358,566,639
Time and LTNCDs * 136,408,742 94,156,313 23,621,363 16,100,141 21,651,079 291,937,638
(Forward)
*SGVFS169731*
- 49 -
Parent Company
2022
Gross contractual receivable = 27,156,350
P = 38,707,232
P P17,167,707
= P557,813
= =–
P P83,589,102
=
Gross contractual payable (26,737,134) (38,304,103) (16,951,759) (556,312) – (82,549308)
Bonds payable – – 17,771,674 685,787 42,883,029 61,340,490
P = 98,723,992
P = 41,985,858
P = 17,789,297
P = 69,867,166
P P
= 961,859,945
Parent Company
2021
Financial Assets
COCI =27,454,459
P =–
P =–
P =–
P =−
P P27,454,459
=
Interbank loans receivable 18,525,861 10,555,921 667,490 568,146 – 30,317,418
Securities held under agreements to resell 15,802,951 – – – – 15,802,951
Government securities 57,054 18,448 34,500 11,385,854 4,781,166 16,277,022
Private debt securities 186 16,568 174,279 27,688 2,415,238 2,633,959
Equity securities – – – – – –
Derivative assets:
Private debt securities 3,444,953 1,412,324 8,989,090 854,325 45,106,745 59,807,437
Equity securities – – – 22,989,975 1,283,856 24,273,831
Investment securities at amortized cost:
Government securities 6,361,583 214,935 6,969,499 6,040,436 54,925,559 74,512,012
Other receivables 5,992,211 176,561 744,595 110,020 9,764,687 16,788,074
Other assets 134,840 – – – 1,502 136,342
= =96,038,923
P =90,466,533
P =93,986,099
P =
P852,161,797 =P1,566,148,224
Demand =218,277,561
P =–
P =–
P =–
P =−
P P
=218,277,561
Savings * 330,484,688 – – – – 330,484,688
Time and LTNCDs * 191,793,693 96,312,545 16,617,361 22,101,239 30,269,130 357,093,968
Gross contractual receivable 20,904,918 30,667,331 17,594,655 254,995 – 69,421,899
Gross contractual payable (20,620,440) (30,260,033) (17,395,227) (254,853) – (68,530,553)
Bills and acceptances payable 35,960,884 12,204,336 741,537 1,590,756 647,075 51,144,588
Bonds payable – – 952,406 952,406 55,263,239 57,168,051
P P
=110,328,989 =19,183,281
P =24,938,582
P =88,629,111 P
P =1,026,659,613
*SGVFS169731*
- 50 -
4.3.1 BSP Reporting for Liquidity Positions and Leverage
To promote short-term resilience of banks’ liquidity risk profile, BSP requires banks and other
regulated entities to maintain:
 over a 30-calendar day horizon, an adequate level of unencumbered high-quality liquid assets
(HQLA) that consist of cash or assets that can be converted into cash to offset the net cash
outflows they could encounter under a liquidity stress scenario; and
 a stable funding profile in relation to the composition of their assets and off-balance sheet
activities.
To monitor the liquidity levels, the Group computes for its Liquidity Coverage Ratio (LCR), which is
the ratio of HQLA to the total net cash outflows. As of December 31, 2022 and 2021, LCR reported
to the BSP with certain adjustments is shown in the table below:

2022 2021 2022 2021
LCR 246.25% 188.31% 240.35% 177.54%
The Group also computes for its Net Stable Funding Ratio (NSFR), which is the ratio of the available
stable funding to the required stable funding. Both LCR and NSFR should be maintained no lower
than 100.00% on a daily basis under normal situations. As of December 31, 2022 and 2021, NSFR
reported to the BSP with certain adjustments is shown in the table below (amounts, except ratios, are
expressed in millions):

2022 2021 2022 2021
Available stable funding P
=852,706 =867,468
P P
=843,395 =862,121
P
Required stable funding 621,402 630,819 621,765 639,013
NSFR 137.22% 137.51% 135.65% 134.91%
4.4 Market Risk
Market risk is the risk to earnings or capital arising from adverse movements in factors that affect the
market value of instruments, products, and transactions in an institutions’ overall portfolio. Market
risk arises from market making, dealing, and position taking in interest rate, foreign exchange and
equity markets. The succeeding sections provide discussion on the impact of market risk on the
Parent Company’s trading and structural portfolios.
4.4.1 Trading Market Risk
Trading market risk exists in the Parent Company as the values of its trading positions are sensitive to
changes in market rates such as interest rates, foreign exchange rates and equity prices. The Parent
Company is exposed to trading market risk in the course of market making as well as from taking
advantage of market opportunities. For internal monitoring of the risks in the trading portfolio, the
Parent Company uses the Value at Risk (VaR) as a primary risk measurement tool. It adopts both the
Parametric VaR methodology and Historical Simulation Methodology (with 99.00% confidence
level) to measure the Parent Company’s trading market risk. Both the Parametric models and
Historical Simulation models were validated by an external independent validator. Volatilities used
in the parametric are updated on a daily basis and are based on historical data for a rolling 400-day
period while yields and prices in the historical VaR approach are also updated daily. The RMG
reports the VaR utilization and breaches to limits to the risk taking personnel on a daily basis and to
*SGVFS169731*
- 51 -
the ALCO and ROC on a monthly basis. All risk reports discussed in the ROC meeting are noted by
the BOD. The VaR figures are back tested to validate the robustness of the VaR model. Results of
backtesting on a rolling one year period are reported also to the ROC.
The VaR models are designed to measure market risk in a normal market environment. The models
assume that any changes occurring in the risk factors affecting the normal market environment will
follow a normal distribution. The use of VaR has limitations because it is based on historical
volatilities in market prices and assumes that future price movements will follow a statistical
distribution. Due to the fact that VaR relies heavily on historical data to provide information and may
not clearly predict the future changes and modifications of the risk factors, the probability of large
market movements may be under-estimated if changes in risk factors fail to align with the normal
distribution assumption. VaR may also be under- or over- estimated due to the assumptions placed
on risk factors and the relationship between such factors for specific instruments. Even though
positions may change throughout the day, the VaR only represents the risk of the portfolios at the
close of each business day, and it does not account for any losses that may occur beyond the 99.00%
confidence level.
VaR estimates the potential loss on the current portfolio assuming a specified time horizon and level
of confidence at 99.00%. The use of a 99.00% confidence level means that, within a one day horizon,
losses exceeding the VaR figure should occur, on average, not more than once every one hundred
days.
The validity of the assumptions underlying the Parent Company’s VaR models can only be checked
by appropriate backtesting procedures. Backtesting is a formal statistical framework that consists of
verifying that actual losses are within the projected VaR approximations. The Parent Company
adopts both the clean backtesting and dirty backtesting approaches approach in backtesting. Clean
backtesting, consists of comparing the VaR estimates with some hypothetical profit or loss (P&L)
values of the portfolio, having kept its composition unchanged. In this case, the same portfolio is
repriced or marked-to-market at the end of the time interval and the hypothetical P&L is then
compared with the VaR. The other method, called dirty backtesting, consists of comparing the VaR
estimates with the actual P&L values at the end of the time horizon. This method, however, may
pose a problem if the portfolio has changed drastically because of trading activities between the
beginning and the end of the time horizon since VaR models assume that the portfolio is "frozen"
over the horizon. The Parent Company uses the regulatory 3-zone (green, yellow and red) boundaries
in evaluating the backtesting results.
For the years 2022 and 2021, the number of observations which fell outside the VaR is within the
allowable number of exceptions in the green and yellow zones to conclude that there is no problem
with the quality and accuracy of the VaR models at 99.00% confidence level. Nonetheless, closer
monitoring and regular review of the model’s parameters and assumptions are being conducted.
To complement the VaR approximations, the Parent Company conducts stress testing on a quarterly
basis, the results of which are being reported to the BOD. Scenarios used in the conduct of stress test
are event driven and represent the worst one-off event of a specific risk factor. Results of stress
testing are analyzed in terms of the impact to earnings and capital.
Since VaR is an integral part of the Parent Company’s market risk management, VaR limits have
been established annually for all financial trading activities and exposures. Calculated VaR compared
against the VaR limits are monitored. Limits are based on the tolerable risk appetite of the Parent
Company. VaR is computed on an undiversified basis; hence, the Parent Company does not consider
the correlation effects of the three trading portfolios.
*SGVFS169731*
- 52 -
The tables below show the trading VaR (in millions):
Foreign Interest Equities

Trading Portfolio Exchange* Rate Price Total VaR**
December 29, 2022 =1.98
P =130.50
P =0.00
P =132.48
P
Average Daily 6.77 161.09 0.00 167.09
Highest 25.45 889.57 0.00 895.51
Lowest 0.87 118.10 0.00 131.61
* FX VaR is the bankwide foreign exchange risk
** The high and low for the total portfolio may not equal the sum of the individual components as
the highs and lows of the individual trading portfolios may have occurred on different trading days
Foreign Interest Equities

Trading Portfolio Exchange* Rate Price Total VaR**
December 29, 2021 =3.67
P =87.21
P =42.28
P =133.17
P
Average Daily 6.93 401.78 39.50 448.21
Highest 24.90 670.75 48.48 701.79
Lowest 0.88 87.21 23.49 133.17
* FX VaR is the bankwide foreign exchange risk
** The high and low for the total portfolio may not equal the sum of the individual components as
the highs and lows of the individual trading portfolios may have occurred on different trading days
4.4.2 Non-Trading Market Risk
Interest rate risk

The Group seeks to ensure that exposure to fluctuations in interest rates are kept within acceptable
limits. Interest margins may increase as a result of such changes but may be reduced or may create
losses in the event that unexpected movements arise.
Repricing mismatches will expose the Group to interest rate risk. The Group measures the sensitivity
of its assets and liabilities to interest rate fluctuations by way of a “repricing gap” analysis using the
repricing characteristics of its financial instrument positions tempered with approved assumptions.
To evaluate earnings exposure, interest rate sensitive liabilities in each time band are subtracted from
the corresponding interest rate assets to produce a “repricing gap” for that time band. The difference
in the amount of assets and liabilities maturing or being repriced over a one year period would then
give the Group an indication of the extent to which it is exposed to the risk of potential changes in net
interest income. A negative gap occurs when the amount of interest rate sensitive liabilities exceeds
the amount of interest rate sensitive assets. Vice versa, positive gap occurs when the amount of
interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities.
During a period of rising interest rates, a company with a positive gap is better positioned because the
company’s assets are refinanced at increasingly higher interest rates increasing the net interest margin
of the company over time. During a period of falling interest rates, a company with a positive gap
would show assets repricing at a faster rate than one with a negative gap, which may restrain the
growth of its net income or result in a decline in net interest income.
For risk management purposes, the loan accounts are assessed based on next repricing date, thus as an
example, if a loan account is scheduled to reprice three years from year-end report date, slotting of the
account will be based on the date of interest repricing. Deposits with no specific maturity dates are
excluded in the one-year repricing gap except for the portion of volatile regular savings deposits
which are assumed to be withdrawn during the one year period and assumed to be replaced by a
higher deposit rate.
*SGVFS169731*
- 53 -
The Group uses the Earnings at Risk (EaR) methodology to measure the likely interest margin
compression in case of adverse change in interest rates given the Group repricing gap. The repricing
gap covering the one-year period is multiplied by an assumed change in interest rates to yield an
approximation of the change in net interest income that would result from such an interest rate
movement. The Group BOD sets a limit on the level of EaR exposure tolerable to the Group. EaR
exposure and compliance to the EaR limit is monitored monthly by the RMG and subject to a
quarterly stress test.
The following table sets forth the repricing gap position of the Group and the Parent Company:
Consolidated
2022
Financial Assets*
Due from BSP and other banks = 57,044,759
P = 12,537,877
P = 3,792,192
P = 7,078,521
P = 40,258,194
P =
P120,711,543
Interbank loans receivable and
securities held under
agreements to resell 69,845,933 4,825,901 2,118,690 4,023,440 − 80,813,964
Receivables from customers and
other receivables - gross** 38,027,100 45,572,755 34,155,255 35,259,733 188,411,533 341,426,376
Total financial assets = 164,917,792
P P62,936,533
= P40,066,137
= P46,361,694
= P
= 228,669,727 P
= 542,951,883
Financial Liabilities*
Savings = 114,430,938
P P82,873,557
= P27,876,786
= = 50,253,238
P P
= 244,506,016 P
= 519,940,535
Time*** 57,117,230 30,218,746 11,043,959 9,460,545 4,272,828 112,113,308
Bonds payable − − 16,696,885 − 41,742,212 58,439,097
P =
P116,732,793 = 55,635,048
P = 60,083,747
P P
= 292,091,036 P
= 705,473,313
Repricing gap (P
= 16,012,897) (P
= 53,796,260) (P
= 15,568,911) (P
= 13,722,053) (P
= 63,421,309) (P
= 162,521,430)
Cumulative gap (16,012,897) (69,809,157) (85,378,068) (99,100,121) (162,521,430)
* Financial instruments that are not subject to repricing/rollforward were excluded
** Receivables from customers excludes residual value of leased assets (Note 10)
***Excludes LTNCD
Consolidated
2021
Financial Assets*
Due from BSP and other banks =125,574,144
P =12,580,589
P =4,001,191
P =7,196,019
P =38,758,402
P =188,110,345
P
agreements to resell 34,549,285 10,771,927 1,466,248 1,115,301 − 47,902,761
Receivables from customers and
P =87,657,374
P =23,872,210
P =39,259,781
P P
=142,703,170 P
=582,332,188
Savings =135,672,175
P =68,263,209
P =23,605,886
P =49,986,458
P =220,893,955
P =498,421,683
P
Time*** 93,532,161 43,039,858 4,787,996 3,235,736 7,133,803 151,729,554
Bonds payable − − − 53,383,421 53,383,421
P =119,333,213
P P28,437,866
= =53,481,998
P =283,099,874
P =756,488,455
P
Repricing gap =16,704,149
P (P
=31,675,839) (P
=4,565,656) (P
=14,222,217) (P
=140,396,704) (P
=174,156,267)
Cumulative gap 16,704,149 (14,971,690) (19,537,346) (33,759,563) (174,156,267)
***Excludes LTNCD
*SGVFS169731*
- 54 -
Parent Company
2022
Financial Assets*
Due from BSP and other banks = 53,592,812
P = 10,577,151
P = 3,520,771
P = 6,789,024
P = 37,820,976
P =
P112,300,734
repurchase agreement 69,014,896 4,333,680 2,118,690 3,791,340 – 79,258,606
Receivable from customers and
Total financial assets = 160,634,808
P = 60,483,586
P = 39,794,716
P P45,840,097
= P
= 226,232,509 P
= 532,985,716
Savings = 113,443,295
P = 82,873,557
P = 27,876,786
P = 50,253,238
P P
= 244,481,764 P
= 518,928,640
Time*** 59,700,130 28,124,706 8,370,715 8,430,094 4,140,440 108,766,085
Bonds payable – – 16,696,885 – 41,742,212 58,439,097
Bills and acceptances payable 9,231,579 3,540,473 – – 1,115,983 13,888,035
P =
P114,538,736 = 52,944,386
P = 58,683,332
P P
= 291,480,399 P
= 700,021,857
Repricing gap (P
= 21,740,196) (P = 54,055,150) (P = 13,149,670) (P
= 12,843,235) (P
= 65,247,890) (P
= 167,036,141)
Cumulative gap (21,740,196) (75,795,346) (88,945,016) (101,788,251) (167,036,141)
* Financial instruments that are not subject to repricing/rollforward were excluded.
** Receivable from customers excludes residual value of leased assets (Note 10).
***Excludes LTNCD.
Parent Company
2021
Financial Assets*
Due from BSP and other banks =
P121,537,698 =10,920,763
P =3,158,864
P =7,169,884
P =37,294,450
P =
P180,081,659
repurchase agreement 33,268,898 10,642,100 1,066,128 1,115,301 – 46,092,427
Receivable from customers and
P =85,867,721
P =22,629,763
P =39,233,646
P P
=141,239,218 P
=572,493,168
Savings =134,107855
P =68,263,209
P =23,605,886
P =49,986,458
P =221,049,602
P =497,013,010
P
Time*** 95,172,643 44,321,054 5,379,430 6,190,653 7,002,570 158,066,350
Bonds payable – – – – 53,383,421 53,383,421
Bills and acceptances payable 42,808,063 7,284,147 – – 1,020,808 51,113,018
P =119,868,410
P =28,985,316
P =56,177,111
P =282,456,401
P =759,575,799
P
Repricing gap =11,434,259
P (P
=34,000,689) (P
=6,355,553) (P
=16,943,465) (P
=141,217,183) (P
=187,082,631)
Cumulative gap 11,434,259 (22,566,430) (28,921,983) (45,865,448) (187,082,631)
***Excludes LTNCD
The following table sets forth, for the year indicated, the impact of changes in interest rates on the
Group’s and the Parent Company’s repricing gap for the years ended December 31, 2022 and 2021:
Consolidated
2022 2021
Statement Statement
of Income Equity of Income Equity
+50bps (P
=352,749) (P
=352,749) (P
=75,953) (P
=75,953)
-50bps 352,749 352,749 75,953 75,953
+100bps (705,498) (705,498) (151,907) (151,907)
-100bps 705,498 705,498 151,907 151,907
*SGVFS169731*
- 55 -
Parent Company
2022 2021
Statement Statement
+50bps (P
=372,994) (P
=372,994) (P
=118,226) (P
=118,226)
-50bps 372,994 372,994 118,226 118,226
+100bps (745,988) (745,988) (236,452) (236,452)
-100bps 745,988 745,988 236,452 236,452
As one of the long-term goals in the risk management process, the Group has also implemented the
adoption of the economic value approach in measuring the impact of the interest rate risk in the
banking books to complement the earnings at risk approach using the modified duration approach.
Cognizant of this requirement, the Group has undertaken the initial activities such as identification of
the business requirement and design of templates for each account and the inclusion of this
requirement in the Asset Liability Management business requirement definition.
Foreign currency risk

Foreign exchange is the risk to earnings or capital arising from changes in foreign exchange rates.
The Group takes on exposure to effects of fluctuations in the prevailing foreign currency exchange
rates on its financials and cash flows.
Foreign currency liabilities generally consist of foreign currency deposits in the Parent Company’s
FCDU books, accounts made in the Philippines or which are generated from remittances to the
Philippines by Filipino expatriates and overseas Filipino workers who retain for their own benefit or
for the benefit of a third party, foreign currency deposit accounts with the Parent Company and
foreign currency-denominated borrowings appearing in the regular books of the Parent Company.
Foreign currency deposits are generally used to fund the Parent Company’s foreign currency-
denominated loan and investment portfolio in the FCDU. Banks are required by the BSP to match the
foreign currency liabilities with the foreign currency assets held through FCDUs. In addition, the
BSP requires a 30.00% liquidity reserve on all foreign currency liabilities held through FCDUs.
Outside the FCDU, the Parent Company has additional foreign currency assets and liabilities in its
foreign branch network.
The Group’s policy is to maintain foreign currency exposure within acceptable limits and within
existing regulatory guidelines. The Group believes that its profile of foreign currency exposure on its
assets and liabilities is within conservative limits for a financial institution engaged in the type of
business in which the Group is involved.
The table below summarizes the exposure to foreign exchange rate risk excluding those under the
FCDU, categorized by currency (amounts in Philippine peso equivalent).
Consolidated
2022 2021
USD Others* Total USD Others* Total
Assets
COCI and due from BSP = 84,087
P P220,965
= = 305,052
P =215,072
P =493,719
P =708,791
P
Interbank loans receivable and securities held
under agreements to resell 1,055,631 1,963,052 3,018,683 1,824,404 2,314,037 4,138,441
Loans and receivables 27,845,651 9,647,963 37,493,614 27,522,800 11,002,833 38,525,633
Financial assets at FVTPL 631 1,708 2,339 171,178 1,506 172,684
Financial assets at FVOCI 836,677 1,359,428 2,196,105 519,881 1,569,257 2,089,138
Investment securities at amortized cost 145,145 512,077 657,222 133,824 174,946 308,770
Other assets 123,263 1,119,773 1,243,036 5,819,720 1,223,698 7,043,418
Total assets 45,899,547 21,077,326 66,976,873 50,366,728 21,183,185 71,549,913
(Forward)
*SGVFS169731*
- 56 -
Consolidated
2022 2021
Liabilities
Deposit liabilities = 8,239,094
P = 7,994,078
P = 16,233,172
P =8,006,094
P =7,778,145
P =15,784,239
P
Derivative liabilities 130 93 223
Bills and acceptances payable 11,984,358 16,950 12,001,308 49,117,805 276,958 49,394,763
Accrued interest payable 93,140 82,035 175,175 53,461 14,072 67,533
Other liabilities 26,256,370 2,199,950 28,456,320 1,115,069 2,211,066 3,326,135
Total liabilities 46,572,962 10,293,013 56,865,975 58,292,559 10,280,334 68,572,893
Net Exposure (P
=673,415) = 10,784,313
P = 10,110,898
P (P
=7,925,831) =10,902,851
P =2,977,020
P
* Other currencies include UAE Dirham (AED,) Australia dollar (AUD), Bahrain dollar (BHD), Brunei dollar (BND), Canada dollar (CAD), Swiss franc
(CHF), China Yuan (CNY), Denmark kroner (DKK), Euro (EUR), UK pound (GBP), Hong Kong dollar (HKD), Indonesia rupiah (IDR), Japanese yen
(JPY), New Zealand dollar (NZD), Saudi Arabia riyal (SAR), Sweden kroner (SEK), Singapore dollar (SGD), South Korean won (SKW), Thailand baht
(THB) and Taiwan dollar (TWD)
Parent Company
2022 2021
Assets
COCI and due from BSP =67,296
P P
=212,487 P
=279,783 =36,108
P =236,932
P =273,040
P
Interbank loans receivable and securities held
under agreements to resell 722,689 725,368 1,448,057 1,825,466 473,239 2,298,705
Loans and receivables 24,638,723 38,217 24,676,940 24,993,494 993,679 25,987,173
Financial assets at FVTPL 216 – 216 169,672 – 169,672
Financial assets at FVOCI 836,677 1,205,124 2,041,801 519,881 1,410,078 1,929,959
Investment securities at amortized cost 5,863 512,077 517,940 5,875 174,946 180,821
Other assets 11,811,574 – 11,811,574 17,127,983 – 17,127,983
Total assets 48,836,310 4,158,839 52,995,149 53,290,509 4,412,569 57,703,078
Liabilities
Deposit liabilities 2,280,526 4,472,986 6,753,512 2,198,873 4,037,877 6,236,750
Derivative liabilities – – – 37 – 37
Bills and acceptances payable 11,927,528 – 11,927,528 48,863,921 – 48,863,921
Accrued interest payable 86,968 408 87,376 48,907 262 49,169
Other liabilities 25,952,250 1,841,698 27,793,948 822,886 1,695,641 2,518,527
Total liabilities 40,247,272 6,315,092 46,562,364 51,934,624 5,733,780 57,668,404
Net Exposure =8,589,038
P (P
=2,156,253) =
P6,432,785 =1,355,885
P (P
=1,321,211) =34,674
P
* Other currencies include AED, AUD, BHD, BND, CAD, CHF, CNY, DKK, EUR, GBP, HKD, IDR, JPY, NZD, PHP, SAR, SEK, SGD, SKW, THB and TWD
The exchange rates used to convert the Group and the Parent Company’s US dollar-denominated
assets and liabilities into Philippine peso were P
=55.76 to USD1.00 as of December 31, 2022 and
=51.00 to USD1.00 as of December 31, 2021.
P
The following tables set forth the impact of the range of reasonably possible changes in the USD:PHP
exchange rate on the Group and the Parent Company’s income before income tax and equity (due to
the revaluation of monetary assets and liabilities) for the years ended December 31, 2022 and 2021:
2022
Statement Statement
+1.00% (P
=15,101) P
=6,734 P=77,524 (P
=85,890)
-1.00% 15,101 (6,734) (77,524) 85,890
2021
Statement Statement
+1.00% (P
=84,457) P79,258
= =8,360
P (P
=13,559)
-1.00% 84,457 (79,258) (8,360) 13,559
The Group and the Parent Company do not expect the impact of the volatility on other currencies to
be material.
*SGVFS169731*
- 57 -
5. Fair Value Measurement
The Group uses the following methods and assumptions in estimating the fair value of its assets and
liabilities:
Assets and Liabilities Fair value methodologies

Cash equivalents At carrying amounts due to their relatively short-term maturity
Derivatives Based on either:
 quoted market prices;
 prices provided by independent parties; or
 prices derived using acceptable valuation models
Debt securities For quoted securities – based on market prices from debt exchanges
For unquoted securities 1 – estimated using either:
 quoted market prices of comparable investments; or
 discounted cash flow methodology
Equity securities For quoted securities – based on market prices from stock exchanges
For unquoted securities – estimated using either:
 quoted market prices of comparable investments 2; or
 adjusted net asset value method 3 and applying a discount for
lack of marketability
Loans and receivables For loans with fixed interest rates – estimated using the discounted cash
flow methodology 4
For loans with floating interest rates – at their carrying amounts
Investment properties Appraisal by independent external and in-house appraisers based on
highest and best use of the property (i.e., current use of the properties) 5
using either:
 market data approach 6; or
 replacement cost approach 7
Short-term financial At carrying amounts due to their relatively short-term maturity
liabilities
Long-term financial For quoted debt issuances – based on market prices from debt exchanges
liabilities For unquoted debt issuances – estimated using the discounted cash flow
methodology 8
Notes:
1
using interpolated PHP BVAL rates provided by the Philippine Dealing and Exchange Corporation (for government securities)
and PHP BVAL rates plus additional credit spread (for corporate/private securities)
2
using the most relevant multiples (e.g., earnings, book value)
3
measures the company’s value by adjusting the carrying value of its assets to their fair values, and then subtracting the fair
value of its liabilities
4
using the current incremental lending rates for similar loans
5
considering other factors such as size, shape and location of the properties, price per square meter, reproduction costs new,
time element, discount, among others
6
using recent sales of similar properties within the same vicinity and considering the economic conditions prevailing at the time
of the valuations and comparability of similar properties sold
7
estimating the investment required to duplicate the property in its present condition
8
using the current incremental borrowing rates for similar borrowings
*SGVFS169731*
- 58 -
Fair value hierarchy

The Group uses the following hierarchy for determining and disclosing the fair value of assets and
liabilities:
 Level 1 - Quoted (unadjusted) prices in active markets for identical assets or liabilities
 Level 2 - Valuation techniques for which the lowest level input that is significant to their fair
value measurement is directly or indirectly observable
 Level 3 - Valuation techniques for which the lowest level of input that is significant to their
fair value measurement is unobservable
The Group and the Parent Company held the following assets and liabilities measured at fair value,
and at cost but for which fair values are disclosed:
Consolidated
2022
Carrying
Value Level 1 Level 2 Level 3 Total
Measured at fair value:
Financial Assets
Government securities P
= 4,371,671 P
= 27,009 P
= 4,344,662 P
=– P
= 4,371,671
Private debt securities 1,610,681 146,495 1,464,186 – 1,610,681
Derivative assets 1,361,951 – 1,361,951 – 1,361,951
Equity securities 2,898 2,898 – – 2,898
Government securities 117,939,783 55,867,413 62,072,370 – 117,939,783
Equity securities 24,812,872 233,298 1,128,254 23,451,320 24,812,872
P
= 165,530,726 P
= 56,521,337 P
= 85,558,069 P
= 23,451,320 P
= 165,530,726
Derivative liabilities P
= 1,039,776 P
=– P
= 1,039,776 P
=– P
= 1,039,776
Fair values are disclosed:
Financial Assets
Investment securities at amortized cost* P
= 110,467,960 P
= 14,695,749 P
= 96,707,252 P
=– P
= 111,403,001
Receivables from customers** 578,120,332 – – 610,493,878 610,493,878
P
= 688,588,292 P
= 14,695,749 P
= 96,707,252 P
= 610,493,878 P
= 721,896,879
Nonfinancial Assets
Investment property:
Land*** P
= 12,508,051 P
=– P
=– P
= 29,868,859 P
= 29,868,859
Buildings and improvements*** 1,286,935 – – 3,510,670 3,510,670
P
= 13,794,986 P
=– P
=– P
= 33,379,529 P
= 33,379,529
Financial liabilities at amortized cost:
Time deposits P
= 112,113,308 P
=– P
=– P
= 112,113,308 P
= 112,113,308
LTNCDs 19,130,012 – 18,922,562 – 18,922,562
Bonds payable 58,439,097 39,955,398 16,878,070 – 56,833,468
Bills payable 7,702,325 – – 7,625,229 7,625,229
P
=197,384,742 P
=39,955,398 P
=35,800,632 P
=119,738,537 P
=195,494,567
* Net of expected credit losses (Note 9)
** Net of expected credit losses and unearned and other deferred income (Note 10)
*** Net of impairment losses (Note 13)
*SGVFS169731*
- 59 -
Consolidated
2021
Carrying
Financial Assets
Government securities =7,956,013
P =3,309,163
P =4,646,850
P =–
P =7,956,013
P
Private debt securities 1,841,548 949,208 892,340 – 1,841,548
Equity securities 5,045 5,045 – – 5,045
Equity securities 24,418,218 252,902 500,259 23,665,057 24,418,218
Private debt securities 23,115,479 10,175,734 12,939,745 – 23,115,479
=179,154,947
P P
=78,049,702 =
P77,440,188 P
=23,665,057 P
=179,154,947
Derivative liabilities =891,531
P =–
P =891,531
P =–
P =891,531
P
Financial Assets
Investment securities at amortized cost* P89,455,843
= P
=17,676,548 =
P77,195,379 =–
P P
=94,871,927
=683,070,936
P P
=17,676,548 =
P77,195,379 P
=627,304,434 P
=722,176,361
Nonfinancial Assets
Land*** =9,582,916
P =–
P =–
P P
=26,914,713 =
P26,914,713
=10,735,896
P =–
P =–
P P
=29,945,572 =
P29,945,572
Time deposits =151,729,554
P =–
P =–
P P
=151,729,554 P
=151,729,554
LTNCDs 28,245,390 – 28,314,622 – 28,314,622
Bonds payable 53,383,421 38,997,788 15,727,174 – 54,724,962
Bills payable 45,843,901 – – 45,860,995 45,860,995
=279,202,266
P P
=38,997,788 =
P44,041,796 P
=197,590,549 P
=280,630,133
Parent Company
2022
Carrying
Financial Assets
Government securities P
= 4,371,671 P
= 27,008 P
= 4,344,663 P
=– P
= 4,371,671
Private debt securities 1,464,186 – 1,464,186 – 1,464,186
P
= 164,401,592 P
= 55,920,174 P
= 85,030,098 P
= 23,451,320 P
= 164,401,592
Derivative liabilities P
= 1,039,776 P
=– P
= 1,039,776 P
=– P
= 1,039,776
(Forward)
*SGVFS169731*
- 60 -
Parent Company
2022
Carrying
Financial Assets
Investment securities at amortized cost* P
= 110,328,678 P
= 14,556,467 P
= 96,707,252 P
=– P
= 111,263,719
674,397,896 14,556,467 96,707,252 596,443,214 707,706,933
Nonfinancial Assets
Land*** P
= 11,953,099 P
=– P
=– P
= 29,264,637 P
= 29,264,637
P
= 13,264,820 P
=– P
=– P
= 32,581,413 P
= 32,581,413
Time deposits P
= 108,766,087 P
=– P
=– P
= 108,766,087 P
= 108,766,087
LTNCDs 19,130,012 – 18,922,562 – 18,922,562
Bonds payable 58,439,097 39,955,398 16,878,070 – 56,833,468
Bills payable 6,609,988 – – 6,532,891 6,532,891
P
= 192,945,184 P
= 39,955,398 P
= 35,800,632 P
= 115,298,978 P
= 191,055,008
Parent Company
2021
Carrying
Financial Assets
P =3,309,163
P =4,646,850
P =–
P =7,956,013
P
Private debt securities 1,692,224 799,884 892,340 – 1,692,224
Private debt securities 23,115,479 10,175,734 12,939,745 – 23,115,479
=178,556,628
P P
=77,735,984 =
P77,561,738 P
=23,258,906 P
=178,556,628
Derivative liabilities =891,346
P =–
P =891,346
P =–
P =891,346
P
Financial Assets
Investment securities at amortized cost* P89,327,894
= P
=17,548,599 =
P77,195,379 =–
P P
=94,743,978
=668,349,211
P P
=17,548,599 =
P77,195,379 P
=612,711,110 P
=707,455,088
Nonfinancial Assets
Land*** =9,053,906
P =–
P =–
P P
=25,982,290 =
P25,982,290
=10,178,327
P =–
P =–
P P
=28,744,162 =
P28,744,162
Time deposits =158,066,350
P =–
P =– =
P P158,066,350 P
=158,066,350
LTNCDs 28,245,390 – 28,314,622 – 28,314,622
Bonds payable 53,383,421 38,997,788 15,727,174 – 54,724,962
Bills payable 44,003,122 – – 44,020,216 44,020,216
=283,698,283
P P
=38,997,788 =
P44,041,796 P=202,086,566 P
=285,126,150
*SGVFS169731*
- 61 -
As of December 31, 2022 and 2021, there were no transfers between Level 1 and Level 2 fair value
measurements.
The following table summarizes the significant unobservable inputs used to calculate the fair value of
Level 3 financial assets at FVOCI of the Group and the Parent Company as of December 31, 2022
and the range of values indicating the highest and lowest level input used in the valuation techniques.
2022 2021
Significant
Unobservable Input -2% +2% -2% +2%
Equity securities Discount for lack of P
=555,656 (P
=555,656) =550,659 (P
P =550,659)
marketability
For certain unquoted equity securities, the Group imputes a discount for lack of marketability which
is a valuation consideration often based on observed data and empirical evidence. Certain valuation
studies suggest that private companies typically sell at lower transaction pricing multiples than
similar public companies.
6. Segment Information
6.1 Business Segments
The Group’s operating businesses are determined and managed separately according to the nature of
services provided and the different markets served with each segment representing a strategic
business unit. The Group’s business segments follow:
 Retail Banking - principally handling individual customer’s deposits, and providing consumer
type loans, credit card facilities and fund transfer facilities;
 Corporate Banking - principally handling loans and other credit facilities and deposit accounts for
corporate and institutional customers;
 Treasury - principally providing money market, trading and treasury services, as well as the
management of the Group’s funding operations by use of Treasury bills, government securities
and placements and acceptances with other banks, through treasury and wholesale banking; and
 Other Segments - include, but not limited to, trust, leasing, remittances and other support
services. Other support services of the Group comprise of operations and finance.
Transactions between segments are conducted at estimated market rates on an arm’s length basis.
Interest is credited to or charged against business segments based on pool rate which approximates
the marginal cost of funds.
For management purposes, business segment report is done on a quarterly basis. Business segment
information provided to the BOD, the chief operating decision maker (CODM), is based on the
reportorial requirements under the Regulatory Accounting Principles (RAP) of the BSP, which differ
from PFRS due to the manner of provisioning for impairment and credit losses, measurement of
investment properties, and the fair value measurement of financial instruments. The report submitted
to CODM represents only the results of operation for each of the reportable segment.
Segment assets are those operating assets that are employed by a segment in its operating activities
and that either are directly attributable to the segment or can be allocated to the segment on a
reasonable basis.
*SGVFS169731*
- 62 -
Segment liabilities are those operating liabilities that result from the operating activities of a segment
and that either are directly attributable to the segment or can be allocated to the segment on a
reasonable basis.
Segment revenues pertain to the net interest margin and other operating income earned by a segment
in its operating activities and that either are directly attributable to the segment or can be allocated to
the segment on a reasonable basis.
The Group has no significant customer which contributes 10.00% or more of the consolidated
revenue.
Business segment information of the Group follows:
2022
Adjustments
Retail Corporate and
Banking Banking Treasury Others Eliminations* Total
Net interest margin
Third party = 1,067,003
P = 27,860,354
P = 8,535,524
P = 20,517
P (P
= 155,828) = 37,327,570
P
Inter-segment 20,436,564 (13,698,864) (6,737,700) – – –
Net interest margin after inter-
segment transactions 21,503,567 14,161,490 1,797,824 20,517 (155,828) 37,327,570
Other income 5,008,794 8,159,543 (128,555) 3,629,778 (488,667) 16,180,893
Segment revenue 26,512,361 22,321,033 1,669,269 3,650,295 (644,495) 53,508,463
Other expenses 13,047,668 9,261,629 628,690 2,069,057 (644,495) 24,362,549
Segment result = 13,464,693
P = 13,059,404
P = 1,040,579
P P1,581,238
= =−
P 29,145,914
Unallocated expenses 12,630,698
Income before income tax 16,515,216
Income tax 4,931,228
Net income 11,583,988
Non-controlling interests 51,670
Net income for the year attributable to
equity holders of the Parent
Company = 11,532,318
P
Other segment information:
Capital expenditures = 166,520
P = 26,621
P = 19,998
P = 9,628
P =–
P = 222,767
P
Unallocated capital expenditure 1,205,888
Total capital expenditure = 1,428,655
P
Depreciation and amortization = 1,308,317
P = 399,629
P = 45,770
P P351,829
= =–
P = 2,105,545
P
Unallocated depreciation and
amortization 2,120,201
Total depreciation and amortization P4,225,746
=
Provision for (reversal of)
impairment, credit and other losses = 840,755
P = 5,281,808
P (P
= 8,104) = 1,083,658
P =–
P = 7,198,117
P
* The adjustments and eliminations column mainly represent the RAP to PFRS adjustments
2021
Adjustments
Net interest margin
Third party =471,810
P P28,638,348
= P5,631,755
= =128,036
P (P
=25,122) =34,844,827
P
Inter-segment 17,316,847 (15,099,161) (2,217,686) – – –
Net interest margin after inter-
segment transactions 17,788,657 13,539,187 3,414,069 128,036 (25,122) 34,844,827
Other income 4,774,488 325,327 1,071,713 36,632,015 399,445 43,202,988
Segment revenue 22,563,145 13,864,514 4,485,782 36,760,051 374,323 78,047,815
Other expenses 15,835,760 11,135,265 28,780 1,872,452 374,323 29,246,580
Segment result =6,727,385
P =2,729,249
P =4,457,002
P =34,887,599
P =−
P 48,801,235
Income before income tax 37,970,597
(Forward)
*SGVFS169731*
- 63 -
2021
Adjustments
Income tax =5,545,194
P
Net income from continuing
operations 32,425,403
Net income from discontinued
operations (735,365)
equity holders of the Parent
Company =31,630,626
P
Capital expenditures =253,520
P =22,288
P =47,096
P =436,928
P =–
P =759,832
P
Unallocated capital expenditure 1,016,364
Total capital expenditure =1,776,196
P
Depreciation and amortization =810,644
P =341,467
P =21,707
P =452,128
P =–
P =1,625,946
P
Total depreciation and amortization =2,845,717
P
Provision for (reversal of)
impairment, credit and other losses =4,355,124
P =8,171,174
P (P
=600,974) =953,687
P =–
P =12,879,011
P
2020
Adjustments
Net interest margin
Third party =103,187
P =30,817,596
P =4,802,612
P =140,191
P (P
=43,123) =35,820,463
P
Inter-segment 17,402,385 (17,307,550) (94,835) – – –
Net interest margin after inter-segment
transactions 17,505,572 13,510,046 4,707,777 140,191 (43,123) 35,820,463
Other income 3,431,422 2,194,121 3,976,885 1,252,087 (383,782) 10,470,733
Segment revenue 20,936,994 15,704,167 8,684,662 1,392,278 (426,905) 46,291,196
Other expenses 14,579,502 18,655,970 1,152,761 739,242 (426,905) 34,700,570
Segment result =6,357,492
P (P=2,951,803) =7,531,901
P =653,036
P =−
P 11,590,626
Income before income tax 548,417
Income tax (1,866,402)
Net income from continuing
operations 2,414,819
Net income from discontinued
operations 210,669
equity holders of the Parent Company =2,614,653
P
Capital expenditures =631,935
P =3,521
P =12,986
P =202,179
P =–
P =850,621
P
Unallocated capital expenditure 664,098
Total capital expenditure =1,514,719
P
Depreciation and amortization =949,266
P =102,145
P =3,281
P =503,681
P =–
P =1,558,373
P
Total depreciation and amortization =3,154,568
P
Provision for impairment, credit and
other losses =3,054,829
P =13,223,352
P =269,915
P =334,525
P =–
P =16,882,621
P
*SGVFS169731*
- 64 -
As of December 31, 2022

Adjustments
Segment assets = 699,718,901
P P
= 318,631,627P
= 102,166,641 P
= 69,835,932 (P= 45,196,025) =
P1,145,157,076
Unallocated assets –
Total assets P
= 1,145,157,076
Segment liabilities = 680,567,910 P
P = 227,645,082 P
= 21,889,505 P
= 93,262,996 (P= 48,114,051) P = 975,251,442
Unallocated liabilities –
Total liabilities =
P975,251,442
As of December 31, 2021

Adjustments
Segment assets =730,811,300
P =264,879,265
P =113,978,883
P P95,128,444
= (P
=21,793,763) P
=1,183,004,129
Unallocated assets 7,780,533
Total assets P
=1,190,784,662
Segment liabilities =726,607,402 P
P =214,925,795 =15,636,431
P =85,879,581
P (P
=21,417,503) P
=1,021,631,706
Unallocated liabilities 7,930,000
Total liabilities =1,029,561,706
P
*The adjustments and eliminations column mainly represent the RAP to PFRS adjustments
6.2 Geographical Segments
Although the Group’s businesses are managed on a worldwide basis, the Group operates in four
principal geographical areas of the world. The distribution of assets, liabilities, credit commitments,
capital expenditures, and revenues by geographic region of the Group follows:
Non-current Assets* Liabilities Credit Commitments

2022 2021 2022 2021 2022 2021
Philippines = 536,693,910 P
P =562,892,766 = 930,350,192
P =980,065,000
P = 43,941,525
P =45,038,930
P
Asia (excluding Philippines) 18,796,243 21,098,989 33,199,104 39,749,446 – –
USA and Canada 2,079,055 1,576,258 11,598,988 9,629,585 – –
United Kingdom 797 1,002 103,158 117,675 – –
= 557,570,005 P
P =585,569,015 = 975,251,442 P
P =1,029,561,706 = 43,941,525
P =45,038,930
P
* Gross of allowance for impairment and credit losses (Note 16) and unearned and other deferred income (Note 10)
Capital Expenditures Revenues

2022 2021 2020 2022 2021 2020
Philippines = 1,394,685
P =1,728,280
P =1,511,914
P = 59,259,052
P =83,243,604
P =56,002,435
P
Asia (excluding Philippines) 33,178 45,649 1,726 1,221,488 1,561,499 867,185
USA and Canada 792 2,267 1,079 839,476 694,003 348,775
United Kingdom – – – 105,279 106,259 202,787
= 1,428,655
P =1,776,196
P =1,514,719
P = 61,425,295
P =85,605,365
P =57,421,182
P
The Philippines is the home country of the Parent Company, which is also the main operating
company. The Group offers a wide range of financial services as discussed in Note 1. Additionally,
most of the remittance services are managed and conducted in Asia, Canada, USA and United
Kingdom.
The areas of operations include all the primary business segments.
*SGVFS169731*
- 65 -
7. Due from Bangko Sentral ng Pilipinas
This account consists of:

2022 2021 2022 2021
Demand deposit (Note 17) =74,701,360
P =81,273,307
P =74,701,360
P =81,273,307
P
Term deposit facility (TDF) 20,000,000 79,728,605 20,000,000 79,728,605
=94,701,360
P =161,001,912
P =94,701,360
P =161,001,912
P
TDFs bear annual interest rates ranging from to 5.00% to 6.43% in 2022, from 1.50% to 1.88% in
2021 and 1.62% to 3.80% in 2020.
8. Interbank Loans Receivable and Securities Held Under Agreements to Resell
8.1 Interbank Loans Receivables
Interbank loans receivables of the Group and the Parent Company bear interest ranging from:

2022 2021 2020 2022 2021 2020
Peso-denominated 1.5% - 6.4% 1.0% - 2.0% 0.0% - 3.7% 1.5% - 6.4% 1.0% - 2.0% 0.0% - 3.7%
Foreign currency-denominated 0.4% - 5.3% 0.0% - 1.5% 0.0% - 2.2% 0.4% - 5.3% 0.0% - 1.5% 0.0% - 2.2%
The amount of the Group’s and the Parent Company’s interbank loans receivable considered as cash
and cash equivalents follow:

2022 2021 2022 2021
Interbank loans receivable =16,291,470
P =32,112,667
P =14,736,112
P =30,302,334
P
Less: Allowance for credit losses (Note 16) 1,369 6,579 1,369 6,579
16,290,101 32,106,088 14,734,743 30,295,755
Less: Interbank loans receivable
not considered as cash and cash
equivalents 6,507,649 1,652,710 5,910,030 1,253,379
P9,782,452
= =30,453,378
P P8,824,713
= =29,042,376
P
8.2 Securities Held Under Agreements to Resell
Securities held under agreements to resell bear interest ranging from 2.00% to 5.50%, from 1.50% to
2.50%, and from 2.00% to 3.25% in 2022, 2021 and 2020, respectively. As of December 31, 2022
and 2021, allowance for credit losses on securities held under agreements to resell amounted to
=2.2 million and =
P P3.6 million, respectively (refer to Note 16.2).
The fair value of the treasury bills pledged under these agreements as of December 31, 2022 and
2021 amounted to = P64.3 billion and P =16.0 billion, for the Group and the Parent Company (refer to
Note 35).
*SGVFS169731*
- 66 -
8.3 Interest Income on Interbank Loans Receivable and Securities Held Under
Agreements to Resell
In 2022, 2021 and 2020, interest income on interbank loans receivable and securities held under
agreements to resell amounted to =P954.6 million, =
P400.4 million, and =
P536.3 million, respectively,
for the Group and P
=896.7 million, =P348.2 million, and P
=478.5 million, respectively, for the Parent
Company.
9. Trading and Investment Securities

2022 2021 2022 2021
Financial assets at FVTPL =
P7,347,201 =11,167,657
P =
P7,195,685 =11,010,278
P
Financial assets at FVOCI 158,183,525 167,987,290 157,205,907 167,546,350
Investment securities at amortized cost 110,467,960 89,455,843 110,328,678 89,327,894
=
P275,998,686 =268,610,790
P =
P274,730,270 =267,884,522
P
9.1 Financial Assets at FVTPL

2022 2021 2022 2021
P =7,956,013
P =
P4,371,671 =7,956,013
P
Private debt securities 1,610,681 1,841,548 1,464,186 1,692,224
Derivative assets (Notes 23 and 35) 1,361,951 1,365,051 1,359,828 1,362,041
Equity securities 2,898 5,045 – –
=7,347,201
P =11,167,657
P =7,195,685
P =11,010,278
P
The nominal interest rates of debt securities at FVTPL range from:

2022 2021 2020 2022 2021 2020
Government securities 1.4% - 8.0% 1.4% - 9.5% 2.6% - 8.0% 1.4% - 8.0% 1.4% - 9.5% 2.6% - 8.0%
Private debt securities 4.9% - 6.9% 4.9% - 6.9% 4.9% - 7.0% 4.9% - 6.9% 4.9% - 6.9% 4.9% - 7.0%
9.2 Financial Assets at FVOCI

2022 2021 2022 2021
Government securities (Note 19) =117,939,783
P =120,453,593
P =117,660,744
P =120,466,974
P
Private debt securities (Note 19) 15,430,870 23,115,479 15,179,345 23,115,479
Equity securities
Quoted 792,216 669,585 734,046 621,415
Unquoted (Note 33) 24,020,656 23,748,633 23,631,772 23,342,482
=158,183,525
P =167,987,290
P =157,205,907
P =167,546,350
P
*SGVFS169731*
- 67 -
Unquoted equity securities include the Parent Company’s retained 49.00% interest in PNB Holdings
Corporation (PNB Holdings) amounting to = P23.2 billion and P=23.0 billion as of December 31, 2022
and 2021, respectively (refer to Note 12.4). The fair value was determined using the adjusted net
asset value method as discussed in Note 5. Further, the Parent Company applied 16.50% discount for
lack of marketability by referring to a number of recent initial public offerings.
The effective interest rates of debt securities at FVOCI range from:

2022 2021 2020 2022 2021 2020
As of December 31, 2022 and 2021, the fair value of financial assets at FVOCI in the form of
government bonds pledged to fulfill its collateral requirements with securities sold under repurchase
agreement transactions amounted to = P2.5 billion and =P32.8 billion, respectively (refer to Note 19.1).
The counterparties have an obligation to return the securities to the Parent Company once the
obligations have been settled. In case of default, the counterparties have the right to hold the
securities and sell them as settlement of the repurchase agreement.
The movements in ‘Net unrealized gains (losses) on financial assets at FVOCI’ of the Group and the
Parent Company are as follows:

2022 2021 2021 2021
Balance at the beginning of the year (P
=703,737) =3,054,403
P (P
=703,737) =3,054,403
P
Changes in fair values:
Debt securities (5,808,581) (1,696,025) (5,799,196) (1,673,631)
Equity securities 394,654 (21,809) 401,920 63,722
Provisions for (reversals of) credit losses
(Note 16) (12,566) 66,752 (12,069) 64,122
Realized losses (gains) 1,058,318 (1,540,192) 1,058,318 (1,540,192)
Share in net unrealized gains (losses) of
subsidiaries and an associate (Note 12) (885,481) (558,030) (902,788) (663,471)
(5,957,393) (694,901) (5,957,552) (695,047)
Income tax effect (Note 30) (1,882) (8,836) (1,723) (8,690)
(P
=5,959,275) (P
=703,737) (P
=5,959,275) (P
=703,737)
As of December 31, 2022 and 2021, the allowance for credit losses on debt securities at FVOCI
(included in ‘Net unrealized gain (loss) on financial assets at FVOCI’) amounted to =
P121.6 million
and P=134.2 million, respectively, for the Group, and =
P119.5 million and =
P131.5 million, respectively,
for the Parent Company (refer to Note 16.2). Movements in ECL on debt securities at FVOCI are
mostly driven by movements in the corresponding gross figures.
*SGVFS169731*
- 68 -
9.3 Investment Securities at Amortized Cost

2022 2021 2022 2021
Government securities (Notes 19 and 32) =
P78,197,433 =34,133,294
P =
P78,058,151 =34,005,345
P
Private debt securities 36,118,377 59,144,715 36,118,377 59,144,715
114,315,810 93,278,009 114,176,528 93,150,060
Less allowance for credit losses (Note 16) 3,847,850 3,822,166 3,847,850 3,822,166
=
P110,467,960 =89,455,843
P =
P110,328,678 =89,327,894
P
The effective interest rates of investment securities at amortized cost range from:

2022 2021 2020 2022 2021 2020
In 2022 and 2021, movements in allowance for expected credit losses on investment securities at
amortized cost are mostly driven by newly originated assets which remained in Stage 1.
As of December 31, 2022 and 2021, the fair value of investment securities at amortized cost in the
form of government bonds pledged to fulfill its collateral requirements with securities sold under
repurchase agreements transactions amounted to = P5.5 billion and =P5.6 billion, respectively, with
corresponding carrying values of P
=5.5 billion and =
P5.3 billion, respectively (refer to Note 19.1). As
of December 31, 2022 and 2021, government securities amounting to = P1.6 billion are deposited with
the BSP in compliance with trust regulations (refer to Note 32).
9.4 Interest Income on Investment Securities at Amortized Cost and FVOCI

2022 2021 2020 2022 2021 2020
Continuing operations:
Financial assets at FVOCI P
= 4,442,846 =2,698,223
P =2,453,720
P P
= 4,432,605 =2,698,419
P =2,407,180
P
Investment securities at amortized cost 3,712,076 3,265,371 3,750,255 3,710,487 3,264,195 3,748,623
8,154,922 5,963,594 6,203,975 8,143,092 5,962,614 6,155,803
Discontinued operations (Note 36):
Financial assets at FVOCI − 11,135 38,756 − − −
Investment securities at amortized cost – 8,695 43,478 – – –
− 19,830 82,234 − − −
= 8,154,922
P =5,983,424
P =6,286,209
P = 8,143,092
P =5,962,614
P =6,155,803
P
9.5 Trading and Investment Securities Gains (Losses) - net

2022 2021 2020 2022 2021 2020
Government securities (P
= 146,580) =–
P P
=395,156 (P
= 146,580) =−
P P
=395,156
Private debt securities (64,458) (825,476) 561,385 (61,631) (954,145) 673,706
Equity securities (197) 2,323 (71,685) – – (64,507)
Derivatives (Note 23) – (23,472) (2,532) – (23,472) (2,532)
(Forward)
*SGVFS169731*
- 69 -

2022 2021 2020 2022 2021 2020
Government securities =–
P =1,510,133
P =2,031,425
P =–
P =1,510,133
P =2,031,425
P
Private debt securities (1,058,318) 30,057 423,839 (1,058,318) 30,057 423,272
Equity securities – 2 – – 2 –
Investment securities at amortized cost (11,230) 38,005 1 (11,230) 38,005 1
(1,280,783) 731,572 3,337,589 (1,277,759) 600,580 3,456,521
Investment in unit investment trust −
funds (UITF) − 43 − − −
Equity securities − − 7 − − −
Government securities – − 8,829 – – –
Investment securities at amortized cost – – 294 – – –
− – 9,173 − − −
(P
= 1,280,783) =731,572
P =3,346,762
P (P
= 1,277,759) =600,580
P =3,456,521
P
Trading gains on investment securities at amortized cost pertain to investments which were redeemed
by the respective issuers prior to their contractual maturity.
10. Loans and Receivables
10.1 Breakdown of Loans and Receivables

2022 2021 2022 2021
Loans and discounts P
=579,484,209 =597,979,601
P P
=567,288,274 =586,259,980
P
Credit card receivables 14,382,681 13,156,945 14,382,681 13,156,945
Customers’ liabilities on letters of
credit and trust receipts 10,378,461 8,315,300 10,248,556 8,143,281
Customers’ liabilities on
acceptances (Note 19) 7,272,876 7,109,896 7,272,876 7,109,896
Bills purchased (Note 22) 1,220,029 1,364,543 935,960 1,087,961
Lease contracts receivable (Note 29) 873,878 2,615,992 − 5,850
613,612,134 630,542,277 600,128,347 615,763,913
Less unearned and other deferred income 756,049 1,118,244 612,582 856,408
612,856,085 629,424,033 599,515,765 614,907,505
Other receivables:
Accrued interest receivable 6,911,100 6,053,656 6,807,292 5,962,235
Sales contract receivables 6,240,309 6,029,384 6,198,127 5,980,029
Accounts receivable 5,478,103 4,191,402 4,380,640 3,579,515
Miscellaneous 559,099 596,037 539,032 1,295,454
19,188,611 16,870,479 17,925,091 16,817,233
632,044,696 646,294,512 617,440,856 631,724,738
Less allowance for credit losses (Note 16) 38,944,781 39,340,761 39,445,838 39,225,977
=
P593,099,915 =606,953,751
P =
P577,995,018 =592,498,761
P
Included in ‘Surplus reserves’ is the amount of =

P4.2 billion and =
P4.5 billion as of December 31, 2022
and 2021, respectively, which pertains to the excess of 1.00% general loan loss provisions over the
computed ECL for Stage 1 accounts as prescribed by BSP Circular 1011, Guidelines on the Adoption
of PFRS 9 (refer to Note 25.3).
*SGVFS169731*
- 70 -
Below is the reconciliation of loans and receivables as to classes:

Consolidated
2022
Corporate Credit Retail Housing Auto Other Other
Loans LGU Cards SMEs Loans Loans Loans Receivables Total
Loans and discounts = 523,188,581
P = 2,855,671
P =–
P = 5,688,129
P =28,589,332
P = 7,028,228
P =12,134,268
P P–
= =579,484,209
P
Credit card receivables – – 14,382,681 – – – – – 14,382,681
Customers’ liabilities on letters
of credit and trust receipts 9,756,981 – – 74,244 – – 547,236 – 10,378,461
acceptances (Note 19) 7,254,333 – – 10,482 – – 8,061 – 7,272,876
Lease contracts receivable
(Note 29) 251,200 – – 622,678 – – - – 873,878
Bills purchased (Note 22) 989,512 – – 8,829 – – 221,688 – 1,220,029
541,440,607 2,855,671 14,382,681 6,404,362 28,589,332 7,028,228 12,911,253 − 613,612,134
Other receivables:
Accrued interest receivable – – – – – – – 6,911,100 6,911,100
Sales contract receivables
(Note 33) – – – – – – – 6,240,309 6,240,309
Accounts receivable – – – – – – – 5,478,103 5,478,103
Miscellaneous – – – – – – – 559,099 559,099
541,440,607 2,855,671 14,382,681 6,404,362 28,589,332 7,028,228 12,911,253 19,188,611 632,800,745
Less: Unearned and other deferred
income 444,999 10,479 – 104,108 309 (62,106) 256,303 1,957 756,049
Allowance for credit losses
(Note 16) 24,679,610 74,637 1,288,228 1,565,064 4,347,845 1,520,319 1,262,007 4,207,071 38,944,781
=516,315,998
P =
P2,770,555 =13,094,453
P =
P4,735,190 =24,241,178
P =5,570,015
P =11,392,943
P =14,979,583
P =593,099,915
P
Consolidated
2021
Loans and discounts =537,441,467
P =4,332,372
P =–
P =7,551,964
P =30,917,379
P =8,838,908
P =8,897,511
P =–
P =597,979,601
P
Customers’ liabilities on letters
of credit and trust receipts 8,236,285 – – 79,015 – – – – 8,315,300
acceptances (Note 19) 7,107,448 – – 2,448 – – – – 7,109,896
(Note 29) 768,872 – – 1,841,270 – – 5,850 – 2,615,992
Bills purchased (Note 22) 1,123,658 – – 48,973 – – 191,912 – 1,364,543
554,677,730 4,332,372 13,156,945 9,523,670 30,917,379 8,838,908 9,095,273 − 630,542,277
Other receivables:
Sales contract receivables
(Note 33) – – – – – – – 6,029,384 6,029,384
Miscellaneous – – – – – – – 596,037 596,037
554,677,730 4,332,372 13,156,945 9,523,670 30,917,379 8,838,908 9,095,273 16,870,479 647,412,756
income 603,496 12,659 – 184,765 (190) 74,135 240,624 2,755 1,118,244
(Note 16) 25,630,373 78,695 2,407,927 1,815,980 3,432,766 1,478,746 967,208 3,529,066 39,340,761
=528,443,861
P =4,241,018
P =10,749,018
P =7,522,925
P =27,484,803
P =7,286,027
P =7,887,441
P =13,338,658
P =606,953,751
P
Parent Company
2022
Loans and discounts = 512,843,742
P = 2,855,671
P =–
P =4,855,370
P =27,663,392
P = 7,028,228
P = 12,041,871
P P– =
= P567,288,274
credit and trust receipts 9,627,076 – – 74,244 – – 547,236 – 10,248,556
acceptances (Note 19) 7,254,333 – – 10,482 – – 8,061 – 7,272,876
Bills purchased (Note 22) 705,443 – – 8,829 – – 221,688 – 935,960
530,430,594 2,855,671 14,382,681 4,948,925 27,663,392 7,028,228 12,818,856 − 600,128,347
Other receivables:
Sales contract receivables – – – – – – – 6,198,127 6,198,127
Miscellaneous – – – – – – – 539,032 539,032
530,430,594 2,855,671 14,382,681 4,948,925 27,663,392 7,028,228 12,818,856 17,925,091 618,053,438
income 397,855 10,479 – 8,545 – (62,106) 256,303 1,506 612,582
(Note 16) 25,961,987 74,637 1,288,228 1,004,130 4,336,786 1,520,319 1,261,966 3,997,785 39,445,838
=504,070,752
P =
P2,770,555 =13,094,453
P =
P3,936,250 =23,326,606
P =
P5,570,015 =11,300,587
P =13,925,800 P
P =577,995,018
*SGVFS169731*
- 71 -
Parent Company
2021
Loans and discounts =529,367,021
P =4,332,372
P P–
= =6,281,693
P =30,022,079
P =8,838,908
P =7,417,907
P =–
P =586,259,980
P
credit and trust receipts 8,064,266 – – 79,015 – – – – 8,143,281
acceptances (Note 19) 7,107,448 – – 2,448 – – – – 7,109,896
(Note 29) − – – − – – 5,850 – 5,850
Bills purchased (Note 22) 847,077 – – 48,973 – – 191,911 – 1,087,961
545,385,812 4,332,372 13,156,945 6,412,129 30,022,079 8,838,908 7,615,668 − 615,763,913
Other receivables:
Sales contract receivables – – – – – – – 5,980,029 5,980,029
Miscellaneous – – – – – – – 1,295,454 1,295,454
545,385,812 4,332,372 13,156,945 6,412,129 30,022,079 8,838,908 7,615,668 16,817,233 632,581,146
income 518,725 12,659 – 8,150 (190) 74,135 240,624 2,305 856,408
(Note 16) 26,900,880 78,695 2,407,927 653,014 3,414,969 1,478,746 954,262 3,337,484 39,225,977
=517,966,207
P =4,241,018
P =10,749,018
P =5,750,965
P =26,607,300
P =7,286,027
P =6,420,782
P =13,477,444
P =592,498,761
P
As of December 31, 2022, the Parent Company has completed the purchase of certain loans from
PNB-Mizuho Leasing and Finance Corporation (PMLFC), a joint venture company owned by the
Parent Company and Mizuho Leasing Co., Ltd., with a total amount of =
P116.3 million.
10.2 Lease Contract Receivables
An analysis of the Group’s and the Parent Company’s lease contract receivables follows:

2022 2021 2022 2021
Minimum lease payments
Due within one year P446,485
= =1,232,961
P P–
= =5,850
P
Due beyond one year but not over five years 196,987 643,821 – –
Due beyond five years – 14,344 – –
643,472 1,891,126 – 5,850
Residual value of leased equipment
Due within one year 107,634 505,784 – –
Due beyond one year but not over five years 122,772 219,082 – –
230,406 724,866 – –
Gross investment in lease contract receivables (Note 29) = 873,878
P =2,615,992
P =–
P =5,850
P
10.3 Interest Income on Loans and Receivables
As of December 31, 2022 and 2021, 69.5% and 69.4%, respectively, of the total receivables
from customers of the Group were subject to interest repricing. As of December 31, 2022 and 2021,
70.5% and 68.3%, respectively, of the total receivables from customers of the Parent Company were
subject to interest repricing. Remaining receivables carry annual fixed interest rates ranging from
1.1% to 9.0% in 2022, from 1.0% to 9.0% in 2021 and from 1.1% to 9.0% in 2020 for foreign
currency-denominated receivables, and from 1.1% to 31.5% in 2022, from 1.1% to 31.5% in 2021
and from 1.1% to 21.0% in 2020 for peso-denominated receivables.
Sales contract receivables bear fixed interest rates per annum ranging from 4.2% to 20.2% in 2022
and from 3.3% to 21.0% in 2021 and 2020.
*SGVFS169731*
- 72 -
11. Property and Equipment
11.1 Details of Property and Equipment
The composition of and movements in property and equipment follow:

Consolidated
2022
Right-of-
Furniture, Long-term Use Asset –
Fixtures and Leasehold Construction Leasehold Bank Premises
Land Building Equipment Land in-progress Improvements (Note 33) Total
Cost
Balance at beginning of year P
=5,143,242 P =3,634,023 P
=8,719,235 P
=571,906 P
=378,559 P
=2,008,756 P
=5,390,721 P
=25,846,442
Additions – 45,380 300,223 – 135,284 66,196 803,905 1,350,988
Disposals (413) – (459,135) – – – – (459,548)
Transfers/others (1,647) 7,965 (158,870) 24,225 (195,456) (164,710) (367,364) (855,857)
Balance at end of year 5,141,182 3,687,368 8,401,453 596,131 318,387 1,910,242 5,827,262 25,882,025
Accumulated Depreciation and
Amortization
Balance at beginning of year – 2,053,670 5,558,050 62,882 – 1,885,809 1,644,824 11,205,235
Depreciation and amortization – 182,676 1,117,484 5,769 – 160,907 1,205,712 2,672,548
Disposals – – (386,208) – – – – (386,208)
Transfers/others – 16,828 (257,988) 11,186 – (146,832) (375,178) (751,984)
Balance at end of year – 2,253,174 6,031,338 79,837 – 1,899,884 2,475,358 12,739,591
Allowance for Impairment Losses
(Note 16) 543,175 625,712 – – – – – 1,168,887
Net Book Value at End of Year P
=4,598,007 P
=808,482 P
=2,370,115 P
=516,294 P
=318,387 P
=10,358 P
=3,351,904 P
=11,973,547
Consolidated
2021
Right-of-
Furniture, Long-term Use Asset –
Fixtures and Leasehold Construction Leasehold Bank Premises
Land Building Equipment Land in-progress Improvements (Note 33) Total
Cost
Balance at beginning of year =11,681,540 P
P =7,306,064 =8,021,090
P =558,206
P =450,453
P =1,831,386
P P2,402,907
= =32,251,646
P
Additions – 52,562 958,466 – 21,483 88,230 3,352,354 4,473,095
Disposals (6,903,931) (4,996,308) (227,513) – – – – (12,127,752)
Transfers/others 365,633 1,271,705 (32,808) 13,700 (93,377) 89,140 (364,540) 1,249,453
Balance at end of year 5,143,242 3,634,023 8,719,235 571,906 378,559 2,008,756 =5,390,721
P 25,846,442
Amortization
Balance at beginning of year – 3,539,412 4,729,038 51,455 – 1,707,836 1,176,303 11,204,044
Depreciation and amortization – 377,186 1,000,213 5,362 – 191,025 564,168 2,137,954
Disposals – (2,313,920) (129,362) – – – – (2,443,282)
Transfers/others – 450,992 (41,839) 6,065 – (13,052) (95,647) 306,519
Balance at end of year – 2,053,670 5,558,050 62,882 – 1,885,809 1,644,824 11,205,235
Allowance for Impairment Losses (Note
16) 543,175 625,712 – – – – – 1,168,887
Net Book Value at End of Year =4,600,067
P P954,641
= =3,161,185
P =509,024
P =378,559
P =122,947
P =3,745,897
P =13,472,320
P
Parent Company
2022
Right-of-
Furniture, Use Asset –
Fixtures and Construction Leasehold Bank Premises
Land Building Equipment in-progress Improvements (Note 33) Total
Cost
=5,143,242 P
=3,560,275 P
=6,647,669 P
=378,560 P
=1,902,569 P
=5,812,506 P
=23,444,821
Additions – 45,380 289,121 135,284 66,196 803,905 1,339,886
Disposals (413) – (233,905) – – – (234,318)
Transfers/others (1,647) 4,479 (169,363) (195,457) (167,372) (353,768) (883,128)
Balance at end of year 5,141,182 3,610,134 6,533,522 318,387 1,801,393 6,262,643 23,667,261
Amortization
Balance at beginning of year – 2,041,441 4,474,160 – 1,813,420 2,133,922 10,462,943
Depreciation and amortization – 181,529 912,988 – 156,953 1,159,332 2,410,802
Disposals – – (233,799) – – – (233,799)
Transfers/others – 14,997 (255,263) – (169,815) (350,524) (760,605)
Balance at end of year – 2,237,967 4,898,086 – 1,800,558 2,942,730 11,879,341
(Note 16) 543,175 625,712 – – – – 1,168,887
=4,598,007 P
=746,455 P
=1,635,436 P
= 318,387 P
=835 P
=3,319,913 P
=10,619,033
*SGVFS169731*
- 73 -
Parent Company
2021
Right-of-
Furniture, Use Asset –
Fixtures and Construction Leasehold Bank Premises
Land Building Equipment in-progress Improvements (Note 33) Total
Cost
Balance at beginning of year =11,681,540
P =7,234,289
P =6,217,199
P =450,452
P =1,733,319
P P2,335,489
= =29,652,288
P
Additions – 52,562 514,992 21,483 86,693 3,350,486 4,026,216
Disposals (6,903,931) (4,996,308) (42,151) – – – (11,942,390)
Transfers/others 365,633 1,269,732 (42,371) (93,375) 82,557 126,531 1,708,707
Balance at end of year 5,143,242 3,560,275 6,647,669 378,560 1,902,569 5,812,506 23,444,821
Accumulated Depreciation and Amortization
Balance at beginning of year – 3,529,281 3,797,886 – 1,645,854 1,103,399 10,076,420
Depreciation and amortization – 376,090 764,403 – 184,959 510,723 1,836,175
Disposals – (2,313,920) (42,105) – – – (2,356,025)
Transfers/others – 449,990 (46,024) – (17,393) 519,800 906,373
Balance at end of year – 2,041,441 4,474,160 – 1,813,420 2,133,922 10,462,943
(Note 16) 543,175 625,712 – – – – 1,168,887
P P893,122
= =2,173,509
P =378,560
P =89,149
P = 3,678,584
P =11,812,991
P
The total recoverable value of certain property and equipment of the Group and the Parent Company
for which impairment loss has been recognized or reversed amounted to P =1.2 billion as of
December 31, 2022 and and = P1.5 billion as of December 31, 2021.
Certain property and equipment of the Parent Company with carrying amount of = P75.6 million and
=92.6 million are temporarily idle as of December 31, 2022 and 2021, respectively. As of
P
December 31, 2022 and 2021, property and equipment of the Parent Company with gross carrying
amount of =P12.6 billion are fully depreciated but are still being used.
Gain (loss) on disposal of property and equipment in 2022, 2021 and 2020 amounted to
=34.9 million, P
P =8.4 million, and =
P7.8 million, respectively, for the Group and =
P32.0 million,
(P
=0.8 million) and P
=1.3 million, respectively, for the Parent Company (refer to Note 26.2).
11.2 Depreciation and Amortization

2022 2021 2020 2022 2021 2020
Depreciation
Property and equipment (Note 33) = 2,672,548
P =2,137,954
P =2,322,515
P = 2,410,802
P =1,836,175
P =1,897,919
P
Investment properties (Note 13) 152,917 76,575 259,128 128,095 55,337 167,536
Chattel mortgage properties 6,375 2,717 14,188 – – –
Amortization of intangible assets
(Note 14) 1,393,906 628,471 558,737 1,370,523 607,559 541,814
4,225,746 2,845,717 3,154,568 3,909,420 2,499,071 2,607,269
Discontinued operations
(Note 36):
Investment properties – 42,450 711 – – –
Property and equipment – 6,592 26,761 – – –
Intangible assets – – 2,101 – – –
– 49,042 29,573 − − −
= 4,225,746
P =2,894,759
P =3,184,141
P = 3,909,420
P =2,499,071
P =2,607,269
P
11.3 Project Real Estate (Project RE)
On September 10, 2020, the Parent Company’s BOD approved Project RE, which is the Parent
Company’s strategic plan to realize the market value of certain real estate properties with a total
carrying value of P
=12.6 billion booked under ‘Property and equipment’ amounting to = P8.4 billion and
‘Investment property’ amounting to P=4.2 billion (refer to Note 13). Project RE aims to reduce the
low-earning assets of the Parent Company to strengthen its financial position. As part of a series of
*SGVFS169731*
- 74 -
transactions which will be carried out to meet the objectives of Project RE, on September 25, 2020,
the Parent Company’s BOD approved the subscription of additional 466,770,000 shares of PNB
Holdings with a par value of =P100 per share, to be issued out of an increase in the authorized capital
stock of PNB Holdings, at a subscription price of P=100 per share in exchange for the above real estate
properties (refer to Note 12.4).
12. Investments in Subsidiaries and an Associate
The consolidated financial statements of the Group include:
Principal Place of Percentage of

Business/Country of Functional Ownership
Industry Incorporation Currency Direct Indirect
Subsidiaries
Allied Integrated Holdings, Inc. (AIHI) Holding Company Philippines PHP 100.00 –
PNB Capital and Investment Corporation (PNB Capital) Investment - do - PHP 100.00 –
PNB Securities, Inc. (PNB Securities) Securities Brokerage - do - PHP 100.00 –
PNB Corporation – Guam (a) Remittance USA USD 100.00 –
PNB International Investments Corporation (PNB IIC) Investment - do - USD 100.00 –
PNB Remittance Centers, Inc. (PNB RCI) (b) Remittance - do - USD – 100.00
PNB Remittance Co. (Nevada) (c) Remittance -do- USD – 100.00
PNB RCI Holding Co. Ltd. (PNB RHCL) Holding Company - do - USD – 100.00
PNB Remittance Co. (Canada) (d) Remittance Canada CAD – 100.00
PNB Europe PLC (PNB Europe) Banking United Kingdom GBP 100.00 –
Allied Commercial Bank (ACB) Banking China CNY 99.04 –
PNB-Mizuho Leasing and Finance Corporation (PMLFC) Leasing/Financing Philippines PHP 75.00 –
PNB-Mizuho Equipment Rentals Corporation (e) Rental - do - PHP – 75.00
PNB Global Remittance & Financial Co. (HK) Ltd. (PNB GRF) Remittance Hong Kong HKD 100.00 –
Allied Banking Corporation (Hong Kong) Limited (ABCHKL) Banking - do - HKD 51.00 –
ACR Nominees Limited (f) Service - do - HKD – 51.00
Oceanic Holding (BVI) Ltd. Holding Company British Virgin Islands USD 27.78 –
Associate
Allianz-PNB Life Insurance, Inc. (APLII) Insurance Philippines PHP 44.00 –
(a)
Ceased operations on June 30, 2012 and license status became dormant thereafter
(b)
Owned through PNB IIC
(c)
Owned through PNB RCI
(d)
Owned through PNB RHCL
(e)
Owned through PMLFC
(f)
Owned through ABCHKL
The details of this account follow:

2022 2021 2022 2021
Investment in Subsidiaries
ACB P−
= =−
P P6,087,520
= P6,087,520
=
AIHI − − 3,435,041 10,935,041
PNB IIC − − 2,028,202 2,028,202
PNB Europe PLC − − 1,327,393 1,327,393
ABCHKL − − 947,586 947,586
PNB Capital − − 850,000 850,000
PNB GRF − − 753,061 753,061
PMLFC − − 481,943 481,943
OHBVI − − 291,841 291,841
PNB Securities − − 62,351 62,351
PNB Corporation – Guam − − 7,672 7,672
− − 16,272,610 23,772,610
Investment in an Associate – APLII 3,365,089 2,973,089 3,365,089 2,973,089
Accumulated equity in net earnings (losses)
of subsidiaries and an associate:
Balance at beginning of year 214,939 164,150 (237,283) 63,633
Equity in net earnings (losses) for the year (56,060) 50,789 747,341 (650,134)
Cash dividends declared by a subsidiary − − (792,000) (300,000)
Effect of loss of control over PNB Holdings − − − 616,231
Effect of disposal group classified as held for sale
(Note 36) − − − 32,987
158,879 214,939 (281,942) (237,283)
(Forward)
*SGVFS169731*
- 75 -

2022 2021 2022 2021
Accumulated share in:
Aggregate reserves (losses) on life insurance policies = 136,096
P (P
=626,394) = 136,096
P (P
=626,394)
Net unrealized losses on financial assets at FVOCI
(Note 9) (979,407) (93,926) (968,953) (66,165)
Accumulated translation adjustments − − 1,770,747 1,381,305
Remeasurement gain on retirement plan 8,107 399 90,457 78,289
(835,204) (719,921) 1,028,347 767,035
= 2,688,764
P =2,468,107
P = 20,384,104
P =27,275,451
P
In 2002, the Parent Company underwent a quasi-reorganization which was approved by the SEC on
November 7, 2002. As of December 31, 2022 and 2021, the acquisition cost of the investments in the
Parent Company’s separate financial statements includes the balance of = P2.1 billion consisting of the
translation adjustment and accumulated equity in net earnings, net of dividends subsequently received
from the quasi-reorganization date, that were closed to deficit on restructuring date and are not
available for dividend declaration.
12.1 Investment in AIHI (formerly PNB Savings Bank or PNBSB)
On March 1, 2020, the Parent Company acquired the assets and assumed the liabilities of PNBSB in
exchange for cash, equivalent to the fair values of the net assets acquired. The Parent Company
recognized the net assets of PNBSB at their carrying values, and the excess of the carrying values
over the settlement price amounting to =P390.5 million is accounted for as ‘Other equity reserves’ in
the parent company financial statements. On March 5, 2020, PNBSB surrendered its banking license
to the BSP.
On October 28, 2020, the BOD of PNBSB approved, among others, the change in the name of the
corporation from “PNB Savings Bank” to “Allied Integrated Holdings, Inc.” and the shortening of the
corporation’s term to December 31, 2022. On December 3, 2020, the Monetary Board (MB) of the
BSP approved the conversion of PNBSB to a holding company and on February 23, 2021, the SEC
approved the change of the corporate name.
On February 10, 2022, the SEC approved the decrease of AIHI’s authorized capital stock from
=15.0 billion divided into 149,975,000 common shares with par value of =
P P100 each and 25,000
preferred shares with par value of =
P100 each to =
P3.0 billion divided into 30,000,000 common shares
with par value of =
P100 each. Consequently, on February 18, 2022, out of the = P10.5 billion subscribed
and paid-up capital of the Parent Company in AIHI, the latter returned P=7.5 billion to the Parent
Company.
12.2 Investment in PNB Capital
On December 16, 2022 and December 17, 2021, the BOD of PNB Capital approved the declaration of
cash dividends amounting to =
P300.0 million, which were subsequently paid to the
Parent Company on December 22, 2022 and June 29, 2022, respectively.
12.3 Investment in PMLFC
On June 24, 2022, the BOD of the Parent Company approved the proposal to amend the Articles of
Incorporation of PMLFC, shortening its corporate term to March 31, 2024, subject to necessary
approvals. On December 23, 2022 the SEC approved the above amendment. The Parent Company
and its joint venture partner, Mizuho Leasing Co. Ltd., mutually agreed to wind down operations of
PMLFC due to the impact of the COVID-19 pandemic to the operations of the joint venture company
and the domestic leasing industry.
*SGVFS169731*
- 76 -
As of December 31, 2022 and 2021, the carrying value of the Parent Company’s equity investment in
PMLFC is already reduced to nil. However, by virtue of the Parent Company’s commitment to
provide further funding in PMLFC, the Parent Company recognized additional losses amounting to
=95.5 million and =
P P164.5 million in 2022 and 2021, respectively and representing its share in the
accumulated net losses of PMLFC. Further, the Parent Company recognized provision for liability
amounting to =P649.7 million and = P125.1 million relating to the undrawn loan commitments of
PMLFC as of December 31, 2022 and 2021, respectively, recorded under ‘Other liabilities’ in the
statement of financial position (refer to Notes 22 and 33).
12.4 Investment in PNB Holdings
On January 13, 2021, the SEC approved the increase in the authorized capital stock of PNB Holdings
from P
=500.0 million divided into 5,000,000 shares with par value of P =100 per share, to =P50.5 billion
divided into 505,000,000 shares with the same par value. On the same date, the Parent Company
proceeded with the subscription of additional 466,770,000 shares of PNB Holdings shares in
exchange for certain real estate properties with fair values of =
P46.7 billion (refer to Notes 11.3 and
13).
On April 23, 2021, the Parent Company’s BOD approved the property dividend declaration of up to
239,353,710 common shares of PNB Holdings, representing 51.00% ownership, with a par value of
=100 per share, to all stockholders of record as of May 18, 2021, or =
P P23.9 billion.
On December 24, 2021, the SEC approved the property dividend declaration. On the same date, the
Parent Company assessed that it has lost control over PNB Holdings, and accordingly classified its
retained interest of 49.00% in PNB Holdings as financial asset at FVOCI with no recycling to profit
or loss, in accordance with PFRS 9. Such investment was remeasured from its carrying amount of
=6.6 billion to its fair value as of December 24, 2021 of P
P =23.0 billion, resulting in a gain on
remeasurement of = P16.5 billion and =
P16.4 billion in the consolidated and parent company financial
statements, respectively (refer to Note 33).
Further, the Group and the Parent Company recognized gain on loss of control over PNB Holdings of
=17.0 billion and =
P P17.1 billion in the consolidated and parent company financial statements,
respectively. On December 21, 2021, the Parent Company was able to secure ruling from the
Bureau of Internal Revenue (BIR) that the transfer of properties to PNB Holdings is not subject to
tax, except for documentary stamps tax (DST). Further, on March 10, 2022, the Parent Company was
able to secure another ruling from the BIR that the property dividends distribution is exempt from tax,
except for DST.
The Parent Company was able to demonstrate loss of control over PNB Holdings because of the
following:
 Declaration of 51.00% ownership in PNB Holdings as property dividends
 Execution of proxy in favor of LTG for the remaining 49.00% held by the Group
 Election of new BOD made by the stockholders of PNB Holdings in January 2021, effectively
resulting in the Group having no representations in the BOD of PNB Holdings
 Appointment of key management personnel by the BOD of PNB Holdings, resulting in the Group
having no officers and staff participating in the day-to-day operations of PNB Holdings
 Approval of the SEC of the property dividend declaration and distribution to all stockholders as
of May 18, 2021
*SGVFS169731*
- 77 -
The foregoing corporate actions were taken by PNB and LTG to allow PNB to focus on its core
banking business. Accordingly, these factors demonstrate that the Group no longer exercises control
over PNB Holdings as certain elements of control under PFRS 10, Consolidated Financial
Statements, are no longer demonstrated. The Group also reclassified the results of operations of PNB
Holdings as discontinued operations (refer to Note 36.2).
Further, the Group no longer has a significant influence over PNB Holdings by virtue of the
execution of a proxy in favor of LTG to vote all shares registered in the name of PNB on any and all
matters in the Annual Stockholders’ Meeting of PNB Holdings and the fact that LTG controls both
PNB and PNB Holdings.
12.5 Investment in PNB General Insurers Co., Inc. (PNB Gen)
On December 29, 2020, the Parent Company and PNB Holdings entered into a Sale and Purchase
Agreement (SPA) for the sale of all their respective shareholdings in PNB Gen to Alliedbankers
Insurance Corporation (ABIC), an affiliate, for a total purchase price of =
P1.5 billion, which was paid
as follows:
 PNB Holdings Purchase Price (P =521.8 million) – fully paid on December 28, 2020
 PNB Purchase Price (P =1.0 billion) – paid in four tranches until April 30, 2021, earning interest at
6.00% per annum
The SPA also provides for a grant of an exclusive bancassurance arrangement with ABIC with a
minimum guaranteed term of 15 years for an additional consideration of =
P50.0 million, on top of the
total purchase price.
On December 29, 2020, the Insurance Commission approved the above transaction. As of
December 31, 2020, only the sale of PNB Holdings of its shares in PNB Gen met all the closing
conditions for the sale. Accordingly, PNB Holdings closed and completed the sale of its 34.25%
shareholdings in PNB Gen, recognizing gain on sale of P =344.7 million, which is included under
‘Equity in net earnings of subsidiaries’ in the 2020 parent company statement of income, but treated
as an equity transaction in the consolidated financial statements as ‘Other equity reserves’.
In 2021, the Group and the Parent Company recognized loss on sale of its shares in PNB Gen
amounting to =P149.5 million and = P134.9 million, respectively, recorded under ‘Gain on loss of
control of subsidiaries - net’. The Parent Company also received interest income of =P14.1 million
from ABIC for this transaction (refer to Note 33.1).
12.6 Material Non-Controlling Interests
Proportion of equity interest held by material NCI follows:
Equity interest Accumulated balances Profit allocated to

of NCI of material NCI material NCI
Principal Activities 2022 2021 2022 2021 2022 2021
ABCHKL Banking 49.00% 49.00% = 2,179,752
P =1,912,800
P = 79,115
P =65,399
P
OHBVI Holding Company 72.22% 72.22% 1,079,035 985,794 1,239 201
*SGVFS169731*
- 78 -
The following table presents financial information of ABCHKL as of December 31, 2022 and 2021:
2022 2021
Statement of Financial Position
Current assets P
=9,548,596 =8,426,632
P
Non-current assets 2,282,698 2,583,273
Current liabilities 6,616,975 6,299,157
Non-current liabilities 834,454 807,075
Statement of Comprehensive Income

Revenues P
=415,387 =374,407
P
Expenses 253,928 240,940
Net income 161,459 133,467
Total comprehensive income 502,413 320,506
Statement of Cash Flows
Net cash provided by operating activities P
=610,988 =543,634
P
Net cash provided by (used in) investing activities 21,293 (320)
Net cash used in financing activities − (6,768)
The following table presents financial information of OHBVI as of December 31, 2022 and 2021:
2022 2021
Statement of Financial Position
Current assets P
=1,494,051 =1,364,988
P
Statement of Comprehensive Income

Revenues/Net income/Total comprehensive income P
=1,715 =278
P
Statement of Cash Flows

Net cash provided by operating activities P
=129,062 =79,927
P
The Parent Company determined that it controls OHBVI through its combined voting rights of
70.56% which arises from its direct ownership of 27.78% and voting rights of 42.78% assigned by
certain stockholders of OHBVI to the Parent Company through a voting trust agreement.
12.7 Investment in APLII
On June 6, 2016, the Parent Company entered into agreements with Allianz SE (Allianz), a German
company engaged in insurance and asset management, for the sale of the 51.00% interest in PNB Life
Insurance, Inc. (PNB Life) for a total consideration of USD66.0 million to form a new joint venture
company named “Allianz-PNB Life Insurance, Inc.”; and a 15-year exclusive distribution access to
the branch network of the Parent Company and PNBSB (Exclusive Distribution Rights or EDR).
The purchase consideration of USD66.0 million was allocated between the sale of the 51.00% interest
in PNB Life and the EDR amounting to USD44.9 million (P =2.1 billion) and USD21.1 million
(P
=1.0 billion), respectively. The consideration allocated to the EDR was recognized as ‘Deferred
revenue - Bancassurance’ (Note 22) and is amortized to income over 15 years from date of sale. The
Parent Company also receives variable annual and fixed bonus earn-out payments based on
milestones achieved over the 15-year term of the distribution agreement.
*SGVFS169731*
- 79 -
After receiving respective approvals from the BSP on December 6, 2022 and June 14, 2021, the
Parent Company recorded additional investments in APLII amounting to =P392.0 million and
=245.0 million, respectively.
P
Summarized financial information of APLII as of December 31, 2022 and 2021 follows:
2022 2021
Current assets P
=1,452,894 P2,189,208
=
Noncurrent assets 90,446,895 76,895,902
Total assets 91,899,789 79,085,110
Current liabilities 1,535,802 3,217,567
Noncurrent liabilities 87,928,050 73,827,220
Total liabilities 89,463,852 77,044,787
Net assets 2,435,937 2,040,323
Percentage of ownership of the Group 44% 44%
Share in the net assets of the associate P
=1,071,812 =897,742
P
The difference between the share in the net assets of APLII and the carrying value of the investments
represents premium on acquisition/retained interest.
Summarized statement of comprehensive income of APLII in 2022 and 2021 follows:
2022 2021
Revenues P
=4,344,038 =3,729,488
P
Costs and expenses 4,486,380 3,614,058
Net income (loss) (142,342) 115,430
Other comprehensive loss (262,006) (313,853)
Total comprehensive loss (P
=404,348) (P
=198,423)
Group’s share in comprehensive loss for the year (P
=177,913) (P
=87,306)
12.8 Significant Restrictions
The Group does not have significant restrictions on its ability to access or use its assets and settle its
liabilities other than those resulting from the regulatory supervisory frameworks within which
insurance and banking subsidiaries operate.
13. Investment Properties
This account consists of real properties as follows:

2022 2021 2022 2021
Foreclosed or acquired in settlement of loans P
=13,615,263 =10,556,014
P P
=13,085,097 =9,998,445
P
Held for lease 179,723 179,882 179,723 179,882
Total P
=13,794,986 =10,735,896
P P
=13,264,820 =10,178,327
P
*SGVFS169731*
- 80 -
The composition of and movements in this account follow:
Consolidated
2022
Buildings and
Land Improvements Total
Cost
Beginning balance P
=11,531,525 P
=3,126,505 P
=14,658,030
Additions 4,013,930 327,627 4,341,557
Disposals (1,087,296) (88,890) (1,176,186)
Transfers/others 12,978 (27,682) (14,704)
Balance at end of year 14,471,137 3,337,560 17,808,697
Accumulated Depreciation
Balance at beginning of year – 1,717,312 1,717,312
Depreciation (Note 11) – 152,917 152,917
Disposals – (35,454) (35,454)
Transfers/others – 3,267 3,267
Balance at end of year – 1,838,042 1,838,042
Allowance for Impairment Losses (Note 16) 1,963,086 212,583 2,175,669
=12,508,051 P
=1,286,935 P
=13,794,986
Consolidated
2021
Buildings and
Cost
Beginning balance =14,840,368
P =4,354,738
P =19,195,106
P
Additions 280,030 244,693 524,723
Disposals (3,600,962) (1,324,806) (4,925,768)
Transfers/others 12,089 (148,120) (136,031)
Disposals – (502,878) (502,878)
Transfers/others – (22,065) (22,065)
P =1,152,980
P =10,735,896
P
Parent Company
2022
Buildings and
Cost
Beginning balance P
=11,001,803 P
=2,947,345 P
=13,949,148
Additions 4,013,930 327,618 4,341,548
Disposals (1,087,296) (88,890) (1,176,186)
Transfers/others (12,964) 2,614 (10,350)
Disposals – (35,454) (35,454)
Transfers/others – 580 580
=11,953,099 P
=1,311,721 P
=13,264,820
*SGVFS169731*
- 81 -
Parent Company
2021
Buildings and
Cost
Beginning balance =14,322,250
P =4,215,771
P =18,538,021
P
Additions 280,030 54,381 334,411
Disposals (3,600,962) (1,324,806) (4,925,768)
Transfers/others 485 1,999 2,484
Disposals – (502,877) (502,877)
P =1,124,421
P =10,178,327
P
Included in the real estate properties transferred to PNB Holdings in exchange for 466,770,000 shares
of PNB Holdings are investment properties with carrying value of P =4.2 billion (refer to Notes 11.3
and 12.4).
Foreclosed properties of the Parent Company still subject to redemption period by the borrowers
amounted to =P199.9 million and =P229.8 million, as of December 31, 2022 and 2021, respectively.
Valuations were derived on the basis of recent sales of similar properties in the same area as the
investment properties and taking into account the economic conditions prevailing at the time the
valuations were made. The Group and the Parent Company are exerting continuing efforts to dispose
these properties.
The total recoverable value of certain investment properties of the Group and the Parent Company
that were impaired amounted to = P7.4 billion and P
=4.7 billion as of December 31, 2022 and 2021,
respectively.
For the Group and the Parent Company, direct operating expenses on investment properties that
generated rental income during the year (other than depreciation and amortization), included under
‘Litigation and assets acquired expenses’, amounted to =
P29.2 million, P
=28.2 million and =P6.0 million
in 2022, 2021, and 2020, respectively. Direct operating expenses on investment properties that did
not generate rental income included under ‘Litigation and assets acquired expenses’, amounted to
=208.3 million, P
P =173.3 million and =
P204.6 million in 2022, 2021, and 2020, respectively (refer to
Note 27. 2).
*SGVFS169731*
- 82 -
14. Goodwill and Intangible Assets
These accounts consist of:
Consolidated
2022
Intangible Assets with Finite Lives
CDI CRI Software Cost Total Goodwill
Cost
Balance at beginning of year = 1,897,789
P = 391,943
P = 4,705,633
P = 6,995,365
P = 11,221,410
P
Additions − − 881,572 881,572 −
Others − − (106,242) (106,242) −
Balance at end of year 1,897,789 391,943 5,480,963 7,770,695 11,221,410
Accumulated Amortization
Balance at beginning of year 1,687,978 391,943 2,486,010 4,565,931 −
Amortization (Note 11) 189,779 − 1,204,127 1,393,906 −
Others − − (53,064) (53,064) −
Balance at end of year 1,877,757 391,943 3,637,073 5,906,773 −
Net Book Value at End of Year = 20,032
P =−
P = 1,843,890
P = 1,863,922
P = 11,221,410
P
Consolidated
2021
Cost
P =391,943
P =4,134,403
P =6,424,135
P =11,221,410
P
Additions − − 655,455 655,455 −
Others − − (84,225) (84,225) −
Amortization (Note 11) 189,779 − 438,692 628,471 −
Others − − 25,338 25,338 −
Net Book Value at End of Year =209,811
P =−
P =2,219,623
P =2,429,434
P =11,221,410
P
Parent Company
2022
Cost
Balance at beginning of year = 1,897,789
P = 391,943
P = 5,679,926
P = 7,969,658
P = 11,361,768
P
Additions − − 848,426 848,426 −
Others − − (105,306) (105,306) −
Amortization (Note 11) 189,779 − 1,180,744 1,370,523 −
Others − − (52,062) (52,062) −
Net Book Value at End of Year = 20,032
P =−
P = 1,733,584
P = 1,753,616
P = 11,361,768
P
Parent Company
2021
Cost
P =391,943
P =5,167,531
P =7,457,263
P =11,361,768
P
Additions − − 612,515 612,515 −
Others − − (100,120) (100,120) −
(Forward)
*SGVFS169731*
- 83 -
Parent Company
2021
P =391,943
P =3,128,461
P =5,018,603
P =−
P
Amortization (Note 11) 189,779 − 417,780 607,559 −
Others − − 14,539 14,539 −
Net Book Value at End of Year =209,811
P =−
P =2,119,146
P =2,328,957
P =11,361,768
P
14.1 CDI and CRI
CDI and CRI are the intangible assets acquired through the merger of the Parent Company with
Allied Banking Corporation (ABC). CDI includes the stable level of deposit liabilities of ABC which
is considered as favorably priced source of funds by the Parent Company. CRI pertains to ABC’s key
customer base which the Parent Company expects to bring more revenue through loan availments.
CDI is allocated to Retail Banking CGU while CRI is allocated to Corporate Banking CGU. CDI and
CRI are assessed for impairment where indicator(s) of objective evidence of impairment has been
identified.
14.2 Software Cost
Software cost as of December 31, 2022 and 2021 includes capitalized development costs amounting
to =
P2.0 billion, related to the Parent Company’s core banking system.
14.3 Goodwill
The Parent Company accounted for the business combination with ABC under the acquisition method
of PFRS 3. The Group has elected to measure the NCI in the acquiree at proportionate share of
identifiable assets and liabilities. The business combination resulted in the recognition of goodwill
amounting to = P13.4 billion, allocated to the three CGUs which are also reportable segments.
Goodwill is reviewed for impairment annually in the fourth quarter of the reporting period, or more
frequently if events or changes in circumstances indicate that the carrying value may be impaired.
The impairment test is done by comparing the recoverable amount of each CGU with its carrying
amount. The carrying amount of a CGU is derived based on its net assets plus the amount of
goodwill allocated to the CGU. The recoverable amount is the higher of a CGU’s fair value less costs
to sell and its VIU. In 2021, the goodwill impairment test performed by the Parent Company resulted
in an impairment in value of =P2.2 billion in the Corporate Banking segment (recorded under
‘Provision for impairment, credit and other losses’) with the recoverable amount being lower than its
carrying amount. As of December 31, 2022 and 2021, goodwill for each CGU amounted to:
Gross Carrying Impairment Net Carrying

Amount in Value Amount
Retail Banking =6,110,312
P =–
P =6,110,312
P
Corporate Banking 4,190,365 2,153,997 2,036,368
Treasury 3,074,730 – 3,074,730
=13,375,407
P =2,153,997
P =11,221,410
P
*SGVFS169731*
- 84 -
The recoverable amounts of the CGUs have been determined on the basis of the VIU calculation
using the discounted cash flows (DCF) model. The DCF model uses earnings projections based on
financial budgets approved by senior management and the BOD of the Parent Company covering a
three-year period and are discounted to their present value. Estimating future earning involves
judgment which takes into account past and actual performance and expected developments in the
respective markets and in the overall macro-economic environment.
The following rates were applied to the cash flow projections:
2022 2021
Retail Corporate Retail Corporate
Banking Banking Treasury Banking Banking Treasury
Pre-tax discount rate 13.23% 13.23% 11.23% 10.48% 10.48% 8.32%
Projected growth rate 5.50% 5.50% 5.50% 6.60% 6.60% 6.60%
The calculation of VIU is most sensitive to estimates of future cash flows from the business, interest
margin, discount rates, projected long-term growth rates (derived based on the forecast local gross
domestic product) used to extrapolate cash flows beyond the budget period.
The discount rate applied have been determined based on cost of equity for Retail and Corporate
Banking segments and weighted average cost of capital (WACC) for Treasury segment. WACC is
computed by multiplying the cost of equity and the post-tax cost of debt by their relevant weights
using debt-equity mix of comparable listed banks, and adding the products together. The cost of
equity is derived using the capital asset pricing model which is comprised of a market risk premium,
risk-free interest rate and the beta factor, all of which were obtained from external sources of
information. The post-tax cost of debt is comprised of the risk-free interest rate and the Group’s
credit spread, after applying the prevailing corporate income tax.
As of December 31, 2022, management believes that no reasonably possible change in any of the
above key assumptions would cause the carrying value of the goodwill to materially exceed its
recoverable amount.
15. Other Assets

2022 2021 2022 2021
Financial
Return checks and other cash items P46,253
= =133,631
P = 46,253
P =133,631
P
Security deposits (Note 33) 18,309 12,984 – –
Miscellaneous 5,769 3,407 5,207 2,711
70,331 150,022 51,460 136,342
Nonfinancial
Deferred charges (Note 33) 1,477,860 1,065,090 1,472,352 1,053,876
Creditable withholding taxes 856,206 1,686,145 612,550 1,436,059
Real estate inventories held under development (Note 33) 638,875 638,875 638,875 638,875
Prepaid expenses 340,243 645,222 276,417 587,871
Documentary stamps on hand 317,932 357,884 317,378 356,586
Chattel mortgage properties - net of depreciation 211,619 227,187 82,012 99,691
Stationeries and supplies 81,073 87,651 80,838 87,476
Input value-added tax 75,276 119,762 – –
Other investments 26,276 30,760 22,517 27,270
Dividends receivable (Note 12) − − − 300,000
Miscellaneous (Note 28) 1,101,671 868,538 869,644 847,524
5,127,031 5,727,114 4,372,583 5,435,228
5,197,362 5,877,136 4,424,043 5,571,570
Less allowance for credit and impairment losses (Note 16) 1,041,840 1,069,216 1,025,047 1,046,072
= 4,155,522
P =4,807,920
P = 3,398,996
P =4,525,498
P
*SGVFS169731*
- 85 -
‘Deferred charges’ include the share of the Group in the cost of transportation equipment acquired
under the Group’s car plan which shall be amortized monthly.
‘Real estate inventories held under development’ represents parcels of land contributed by the Parent
Company under joint arrangements with real estate developers to be developed as residential
condominium units and subdivision lots.
‘Chattel mortgage properties’ pertain to motor vehicles, equipment and assets other than real estate
properties, which were acquired by the Group in settlement of loans. As of December 31, 2022 and
2021, accumulated depreciation on the chattel mortgage properties amounted to P =229.1 million and
=241.8 million, respectively, for the Group and =
P P215.3 million and =
P227.5 million, respectively, for
the Parent Company. As of December 31, 2022 and 2021, the total recoverable value of certain
chattel mortgage properties of the Group and the Parent Company that were impaired is at
=1.2 million and =
P P0.9 million, respectively.
‘Miscellaneous financial assets’ include revolving fund, petty cash fund and miscellaneous cash and
other cash items. ‘Miscellaneous nonfinancial assets’ include postages, refundable deposits, notes
taken for interest and sundry debits.
16. Impairment, Credit and Other Losses
16.1 Provision for Impairment, Credit and Other Losses

2022 2021 2020 2022 2021 2020
Provision for credit losses = 7,159,781
P =10,980,450
P =16,054,991
P = 7,171,812
P =11,220,504
P =15,723,927
P
Provision for (reversal of) impairment and
other losses 38,336 (255,436) 827,630 133,841 (248,764) 810,408
Impairment in value of goodwill (Note 14) − 2,153,997 − − 2,153,997 −
7,198,117 12,879,011 16,882,621 7,305,653 13,125,737 16,534,335
Provision for credit and impairment losses − 88,141 29,781 − − −
= 7,198,117
P =12,967,152
P =16,912,402
P = 7,305,653
P =13,125,737
P =16,534,335
P
16.2 Allowance for Impairment and Credit Losses
Changes in the allowance for credit losses on financial assets follow:

Consolidated
2022
Securities Held Investment
Under Interbank Financial Securities at
Agreements to Due from Loans Assets at Amortized Loans and Other
Resell Other Banks Receivable FVOCI Cost Receivables Assets Total
Balance at beginning
of year P3,644
= = 10,593
P P6,579
= = 134,151
P = 3,822,166
P P
=39,340,761 P500
= = 43,318,394
P
Provisions (reversals) (1,456) (695) (5,210) (12,566) 25,684 7,154,524 (500) 7,159,781
Accounts charged-off – – – – – (2,785,836) – (2,785,836)
Loan settlement
through dacion
(Note 33) – – – – – (4,591,743) – (4,591,743)
Transfers and others – – – – – (172,925) – (172,925)
Balance at end of year = 2,188
P = 9,898
P = 1,369
P = 121,585
P = 3,847,850
P P
=38,944,781 =–
P = 42,927,671
P
*SGVFS169731*
- 86 -
Consolidated
2021
Agreements to Due from Other Loans Assets at Amortized Loans and Other
Resell Banks Receivable FVOCI Cost Receivables Assets Total
of year =–
P =9,898
P P2,883
= P67,399
= =3,982,398
P P32,414,652
= =500
P P36,477,730
=
Provisions (reversals) 3,644 695 3,696 66,752 (142,249) 11,047,912 – 10,980,450
Accounts charged-off – – – – – (1,439,313) – (1,439,313)
Sale of receivables –
(Note 26) – – – – – (2,520,236) (2,520,236)
Transfers and others – – – – (17,983) (162,254) – (180,237)
Balance at end of year =3,644
P =10,593
P =6,579
P =134,151
P =3,822,166
P =39,340,761
P =500
P =43,318,394
P
Parent Company
2022
of year P3,644
= = 9,873
P P6,579
= P131,521
= = 3,822,166
P = 39,225,977
P P500
= = 43,200,260
P
Provisions (reversals) (1,456) − (5,210) (12,069) 25,684 7,165,363 (500) 7,171,812
Accounts charged-off − − − − − (2,078,219) − (2,078,219)
Loan settlement
through dacion
(Note 33) – – – – – (4,591,743) – (4,591,743)
Transfers and others − − − − − (275,540) − (275,540)
Balance at end of year = 2,188
P = 9,873
P = 1,369
P = 119,452
P = 3,847,850
P P
= 39,445,838 =−
P = 43,426,570
P
Parent Company
2021
of year =–
P =9,873
P P2,883
= P67,399
= =3,982,398
P P31,499,881
= =500
P P35,562,934
=
Provisions (reversals) 3,644 − 3,696 64,122 (142,249) 11,291,291 − 11,220,504
Accounts charged-off − − − − − (1,439,313) − (1,439,313)
Sale of receivables –
(Note 26) – – – – – (2,520,236) (2,520,236)
Transfers and others − − − − (17,983) 394,354 − 376,371
Balance at end of year =3,644
P =9,873
P =6,579
P =131,521
P =3,822,166
P =39,225,977
P =500
P =43,200,260
P
Movements in the allowance for impairment and other losses on nonfinancial assets follow:
Consolidated
2022 2021
Property Property
and Investment Other and Investment Other
Equipment Properties Assets Total Equipment Properties Assets Total
Balance at beginning of
year = 1,168,887
P = 2,204,822
P = 1,068,716
P = 4,442,425
P =1,168,887
P =2,583,670
P =1,040,096
P =4,792,653
P
Provisions:
Continuing operations − 33,299 5,037 38,336 − (238,052) (17,384) (255,436)
Discontinued operation − − − − − − 88,141 88,141
Disposals − (55,884) (10,077) (65,961) − (197,986) (4,772) (202,758)
Transfers and others − (6,568) (21,836) (28,404) − 57,190 (37,365) 19,825
Balance at end of year = 1,168,887
P = 2,175,669
P = 1,041,840
P = 4,386,396
P =1,168,887
P =2,204,822
P =1,068,716
P =4,442,425
P
Parent Company
2022 2021
Property Property
and Investment Other and Investment Other
Equipment Properties Assets Total Equipment Properties Assets Total
Balance at beginning of
year = 1,168,887
P = 2,175,670
P = 1,045,572
P = 4,390,129
P =1,168,887
P =2,573,532
P =1,039,713
P =4,782,132
P
Provisions (reversals) – 33,299 100,542 133,841 – (238,051) (10,713) (248,764)
Disposals – (55,884) (3,725) (59,609) – (197,986) (4,772) (202,758)
Transfers and others − (2,117) (117,342) (119,459) − 38,175 21,344 59,519
Balance at end of year = 1,168,887
P = 2,150,968
P = 1,025,047
P = 4,344,902
P =1,168,887
P =2,175,670
P =1,045,572
P =4,390,129
P
*SGVFS169731*
- 87 -
The reconciliation of allowance for loans and receivables are shown below:
Consolidated
2022 2021
Stage 1 Stage 2 Stage 3 Total Stage 1 Stage 2 Stage 3 Total
Corporate Loans
Beginning Balance P
=459,223 P
=859,753 P
=24,311,397 P
=25,630,373 =
P437,633 =
P690,482 =
P18,092,141 =
P19,220,256
Transfers to Stage 1 124,442 (122,231) (2,211) – 1,375,088 (51,070) (1,324,018) –
Transfers to Stage 2 (13,026) 7,561,264 (7,548,238) − (21,796) 170,627 (148,831) −
Transfers to Stage 3 (2,707) (181,214) 183,921 – (41,035) (97,886) 138,921 –
Provisions (reversals) 1,040,999 (1,848,298) 4,928,180 4,120,881 1,136,551 501,195 10,381,492 12,019,238
Accounts charged off – – (48,784) (48,784) – – (1,100) (1,100)
Loan settlement through dacion
(Note 33) – – (4,580,430) (4,580,430) – – – –
Sale of receivables (Note 26) – – – – – – (2,520,236) (2,520,236)
Effect of collections and other
movements (153,893) (314,918) 26,381 (442,430) (2,427,218) (353,595) (306,972) (3,087,785)
Ending Balance 1,455,038 5,954,356 17,270,216 24,679,610 459,223 859,753 24,311,397 25,630,373
LGU
Beginning Balance 265 10,632 67,798 78,695 24,040 1,737 24,916 50,693
Provisions (reversals) 261 (2,141) (2,104) (3,984) 22,642 3,902 2,296 28,840
movements (54) (20) – (74) (46,417) 4,993 40,586 (838)
Ending Balance 472 8,471 65,694 74,637 265 10,632 67,798 78,695
Credit Cards
Beginning Balance 61,472 26,686 2,319,769 2,407,927 38,224 26,246 2,523,198 2,587,668
Transfers to Stage 1 14,583 (5,637) (8,946) – 39,251 (6,432) (32,819) –
Transfers to Stage 2 (1,666) 2,188 (522) – (2,254) 5,721 (3,467) –
Provisions (reversals) 375,074 71,292 212,023 658,389 (98,840) 17,705 1,085,746 1,004,611
Accounts charged off – – (2,014,455) (2,014,455) – – (1,399,465) (1,399,465)
movements 44,772 (7,616) 199,211 236,367 94,226 (7,272) 128,159 215,113
Ending Balance 491,509 83,742 712,977 1,288,228 61,472 26,686 2,319,769 2,407,927
Retail SMEs
Transfers to Stage 1 15,101 (386) (14,715) – 7,502 (1,634) (5,868) –
Transfers to Stage 2 (51,349) 51,549 (200) – (351) 2,151 (1,800) –
Transfers to Stage 3 (736) (1,050) 1,786 – (5,680) (6,204) 11,884 –
Provisions (reversals) 155,930 22,928 341,744 520,602 31,995 (1,617) 42,831 73,209
Accounts charged off – – (694,970) (694,970) – – – –
movements (75,048) (62,412) 60,912 (76,548) (238,017) 2,520 170,076 (65,421)
Ending Balance 200,621 26,631 1,337,812 1,565,064 156,723 16,002 1,643,255 1,815,980
Housing Loans
Transfers to Stage 2 (5,794) 71,159 (65,365) – (2,061) 35,012 (32,951) –
Provisions (reversals) (206,039) (335,412) 1,327,486 786,035 391,794 (7,381) (888,382) (503,969)
movements (90,744) 369,022 (149,234) 129,044 (616,995) 17,433 2,162,411 1,562,849
Ending Balance 447,670 115,108 3,785,067 4,347,845 256,953 54,367 3,121,446 3,432,766
Auto Loans
Beginning Balance 8,996 2,166 1,467,584 1,478,746 146,165 43,152 843,487 1,032,804
Transfers to Stage 2 (197) 5,619 (5,422) – (113) 8,396 (8,283) –
Transfers to Stage 3 (350) (1,213) 1,563 – (615) (3,229) 3,844 –
Provisions (reversals) (72,234) (3,455) 456,812 381,123 73,402 6,628 (708,378) (628,348)
movements (985) (193) (332,018) (333,196) (268,468) (49,816) 1,401,707 1,083,423
Ending Balance 20,844 2,253 1,497,222 1,520,319 8,996 2,166 1,467,584 1,478,746
Other Loans
Beginning Balance 242,940 8,236 716,032 967,208 72,427 59,443 1,922,895 2,054,765
Provisions (reversals) (290,921) (7,934) 330,031 31,176 (131,066) (583) (333,647) (465,296)
movements (238,320) 55,941 458,649 276,270 84,250 (107,748) (578,435) (601,933)
Ending Balance 15,750 78,197 1,168,060 1,262,007 242,940 8,236 716,032 967,208
(Forward)
*SGVFS169731*
- 88 -
Consolidated
2022 2021
Other Receivables
Beginning Balance P
=81,507 P
=33,359 P
=3,414,200 P
=3,529,066 =69,326
P =19,486
P =3,197,574
P =3,286,386
P
Transfers to Stage 1 26 (5) (21) – 1,295 (15) (1,280) –
Provisions (reversals) (10,889) 20,157 651,034 660,302 (598,194) (13,427) 131,248 (480,373)
(Note 33) – – (11,313) (11,313) – – – –
movements 22,968 99,664 (84,990) 37,642 622,795 72,548 36,997 732,340
Ending Balance 87,993 148,230 3,970,848 4,207,071 81,507 33,359 3,414,200 3,529,066
Total Loans and Receivables
Beginning Balance 1,268,079 1,011,201 37,061,481 39,340,761 1,248,985 969,118 30,196,547 32,414,650
Transfers to Stage 1 1,069,644 (149,755) (919,889) − 2,099,787 (120,100) (1,979,687) −
Transfers to Stage 3 (45,863) (230,987) 276,850 − (84,716) (258,331) 343,047 −
Provisions (reversals) 992,181 (2,082,863) 8,245,206 7,154,524 828,284 506,422 9,713,206 11,047,912
Accounts charged off − − (2,785,836) (2,785,836) − − (1,439,313) (1,439,313)
(Note 33) − − (4,591,743) (4,591,743) − − − −
Sale of receivables (Note 26) − − − − − − (2,520,236) (2,520,236)
movements (491,304) 139,468 178,911 (172,925) (2,795,844) (420,937) 3,054,529 (162,252)
Ending Balance P
=2,719,897 P
=6,416,988 P
=29,807,896 P
=38,944,781 =
P1,268,079 =
P1,011,201 =
P37,061,481 =
P39,340,761
Parent Company
2022 2021
Corporate Loans
Beginning Balance P
=798,447 P
=848,687 P
=25,253,746 P
=26,900,880 =314,124
P =680,087
P =18,033,402
P =19,027,613
P
Transfers to Stage 1 124,373 (122,162) (2,211) – 1,375,022 (51,067) (1,323,955) –
Transfers to Stage 2 (13,026) 7,561,264 (7,548,238) – (21,486) 170,317 (148,831) –
Provisions (reversals) 1,040,810 (1,848,298) 4,631,517 3,824,029 856,709 501,195 10,912,432 12,270,336
(Note 33) – – (4,580,430) (4,580,430) – – – –
movements (276,166) (304,138) 446,596 (133,708) (1,684,888) (353,959) 163,114 (1,875,733)
Ending Balance 1,671,731 5,954,139 18,336,117 25,961,987 798,447 848,687 25,253,746 26,900,880
LGU
Beginning Balance 265 10,632 67,798 78,695 24,040 1,737 24,916 50,693
Provisions (reversals) 261 (2,141) (2,104) (3,984) 22,642 3,902 2,296 28,840
movements (54) (20) – (74) (46,417) 4,993 40,586 (838)
Ending Balance 472 8,471 65,694 74,637 265 10,632 67,798 78,695
Credit Cards
Provisions (reversals) 375,074 71,292 212,023 658,389 (98,840) 17,705 1,085,746 1,004,611
movements 44,772 (7,616) 199,211 236,367 94,226 (7,272) 128,159 215,113
Ending Balance 491,509 83,742 712,977 1,288,228 61,472 26,686 2,319,769 2,407,927
Retail SMEs
Beginning Balance 151,201 3,712 498,101 653,014 336,912 10,289 559,389 906,590
Transfers to Stage 2 (50,978) 51,178 (200) – (351) 2,151 (1,800) –
Transfers to Stage 3 (305) (780) 1,085 – (5,680) (6,204) 11,884 –
Provisions (reversals) 155,930 22,928 347,446 526,304 31,995 (1,617) 42,831 73,209
movements (88,589) (53,680) (32,919) (175,188) (219,177) 727 (108,335) (326,785)
Ending Balance 182,003 23,329 798,798 1,004,130 151,201 3,712 498,101 653,014
(Forward)
*SGVFS169731*
- 89 -
Parent Company
2022 2021
Housing Loans
Beginning Balance P
=240,858 P
=54,367 P
=3,119,744 P
=3,414,969 =90,814
P =104,984
P =2,171,817
P =2,367,615
P
Provisions (reversals) (287,450) 37,093 1,338,362 1,088,005 384,586 (7,381) (888,382) (511,177)
movements (13,157) (3,683) (149,348) (166,188) (616,523) 20,235 2,154,819 1,558,531
Ending Balance 445,982 114,780 3,776,024 4,336,786 240,858 54,367 3,119,744 3,414,969
Auto Loans
Transfers to Stage 3 (350) (1,213) 1,563 – (615) (3,229) 3,844 –
Provisions (reversals) (72,234) (3,455) 456,812 381,123 73,402 6,628 (708,378) (628,348)
movements (985) (193) (332,018) (333,196) (144,828) (13,607) 1,241,858 1,083,423
Ending Balance 20,844 2,253 1,497,222 1,520,319 8,996 2,166 1,467,584 1,478,746
Other Loans
Beginning Balance 242,936 8,236 703,090 954,262 72,423 59,443 1,910,728 2,042,594
Provisions (reversals) (290,923) (7,934) 330,052 31,195 (131,066) (583) (333,615) (465,264)
Accounts charged off – − – − – − (20,328) (20,328)
movements (238,315) 42,305 472,519 276,509 84,250 (107,748) (579,242) (602,740)
Ending Balance 15,739 64,561 1,181,666 1,261,966 242,936 8,236 703,090 954,262
Other Receivables
Transfers to Stage 1 26 (5) (21) − 1,295 (15) (1,280) −
Provisions (reversals) (10,889) 20,157 651,034 660,302 (598,737) (13,427) 131,248 (480,916)
(Note 33) – – (11,313) (11,313) – – – –
movements 5,581 (10,719) 25,076 19,938 582,158 72,102 (310,877) 343,383
Ending Balance 34,342 37,308 3,926,135 3,997,785 45,243 32,820 3,259,421 3,337,484
Beginning Balance 1,549,418 987,306 36,689,253 39,225,977 973,304 909,122 29,617,455 31,499,881
Transfers to Stage 1 1,069,208 (149,329) (919,879) − 2,099,362 (120,097) (1,979,265) −
Transfers to Stage 3 (27,329) (230,717) 258,046 − (84,633) (258,331) 342,964 −
Provisions (reversals) 910,579 (1,710,358) 7,965,142 7,165,363 540,691 506,422 10,244,178 11,291,291
(Note 33) – – (4,591,743) (4,591,743)
movements (566,913) (337,744) 629,117 (275,540) (1,951,199) (384,529) 2,730,082 394,354
Ending Balance =2,862,622
P P
=6,288,583 P
=30,294,633 P
=39,445,838 =
P1,549,418 P987,306
= P
=36,689,253 P
=39,225,977
*SGVFS169731*
- 90 -
16.3 Gross Carrying Amounts of Loans and Receivables
Movements of the gross carrying amounts of loans and receivables are shown below:
Consolidated
2022 2021
Corporate Loans
Beginning Balance P
=473,712,387 P
=24,933,143 P
=55,428,704 P
=554,074,234 =
P444,131,392 =
P30,217,054 =
P50,749,511 =
P525,097,957
Newly originated assets which
remained in Stage 1 at yearend 122,147,585 – – 122,147,585 227,012,002 – – 227,012,002
Newly originated assets which moved
to Stages 2 and 3 at yearend – 4,634,768 3,170,272 7,805,040 – 4,990,294 8,456,400 13,446,694
Transfers to Stage 1 2,158,216 (2,153,301) (4,915) – 11,278,904 (4,981,067) (6,297,837) –
Transfers to Stage 2 (25,259,322) 53,397,854 (28,138,532) – (7,592,547) 7,936,935 (344,388) –
Transfers to Stage 3 (1,160,805) (2,473,557) 3,634,362 – (1,383,777) (4,625,936) 6,009,713 –
(Note 33) – – (5,958,906) (5,958,906) – – – –
movements (132,121,107) (4,705,073) (197,381) (137,023,561) (199,733,587) (8,604,137) 2,334,605 (206,003,119)
Ending Balance 439,476,954 73,633,834 27,884,820 540,995,608 473,712,387 24,933,143 55,428,704 554,074,234
LGU
Beginning Balance 4,216,332 46,154 57,227 4,319,713 6,390,022 7,450 24,916 6,422,388
remained in Stage 1 at yearend 35,962 – – 35,962 108,593 – – 108,593
movements (1,499,080) (10,834) (569) (1,510,483) (2,282,283) 38,704 32,311 (2,211,268)
Ending Balance 2,753,214 35,320 56,658 2,845,192 4,216,332 46,154 57,227 4,319,713
Credit Cards
Beginning Balance 10,468,937 269,413 2,418,595 13,156,945 9,198,867 199,627 3,132,075 12,530,569
to Stages 2 and 3 at yearend – 39,134 20,775 59,909 – 28,877 21,120 49,997
movements 2,147,359 (110,006) 144,713 2,182,066 1,049,072 (7,300) (58,600) 983,172
Ending Balance 13,157,391 315,914 909,376 14,382,681 10,468,937 269,413 2,418,595 13,156,945
Retail SMEs
Beginning Balance 6,432,116 159,012 2,747,777 9,338,905 10,689,770 881,726 867,413 12,438,909
Accounts charged off – – (694,970) (694,970) – – – –
movements (3,667,627) 54,870 (211,692) (3,824,449) (7,212,621) (659,286) 1,543,842 (6,328,065)
Ending Balance 3,995,703 342,969 1,961,582 6,300,254 6,432,116 159,012 2,747,777 9,338,905
Housing Loans
Beginning Balance 20,002,043 486,743 10,428,783 30,917,569 15,883,951 1,257,045 7,971,308 25,112,304
remained in Stage 1 as at yearend 1,992,738 – – 1,992,738 1,334,034 – – 1,334,034
to Stages 2 and 3 at yearend − 47,129 50,829 97,958 − 52,555 28,779 81,334
Transfers to Stage 1 2,075,863 (155,598) (1,920,265) – 1,842,273 (438,646) (1,403,627) –
Transfers to Stage 3 (1,240,805) (238,698) 1,479,503 – (1,803,489) (519,103) 2,322,592 –
movements (3,526,363) (118,344) (774,535) (4,419,242) 2,999,847 (245,959) 1,636,009 4,389,897
Ending Balance 18,886,113 673,099 9,029,811 28,589,023 20,002,043 486,743 10,428,783 30,917,569
Auto Loans
(Forward)
*SGVFS169731*
- 91 -
Consolidated
2022 2021
movements (P
=2,591,894) (P
=92,662) (P
=769,457) (P
=3,454,013) (P
=3,118,712) (P
=144,749) (P
=660,348) (P
=3,923,809)
Ending Balance 5,017,858 102,192 1,970,284 7,090,334 5,868,366 162,915 2,733,492 8,764,773
Other Loans
Transfers to Stage 1 774,098 (43,098) (731,000) – 1,379,908 (552,924) (826,984) –
Transfers to Stage 2 (12,420) 181,997 (169,577) – (1,253,877) 1,419,173 (165,296) –
Transfers to Stage 3 (1,057,002) (2,473,557) 3,530,559 – (642,400) (183,343) 825,743 –
movements (1,373,244) 2,544,541 (1,834,996) (663,699) (10,100,414) (1,867,179) (4,224,167) (16,191,760)
Ending Balance 9,131,926 1,546,924 1,976,100 12,654,950 7,321,531 367,134 1,165,984 8,854,649
Other Receivables
Beginning Balance 14,609,695 (1,203,874) 3,461,903 16,867,724 14,846,752 (1,417,280) 4,363,870 17,793,342
remained in Stage 1 at yearend 714,679 − − 714,679 (11,596) − − (11,596)
(Note 33) – – (13,656) (13,656) – – – –
movements (91,186) 1,226,286 403,470 1,538,570 (199,803) (114,102) (631,776) (945,681)
Ending Balance 15,069,109 289,229 3,828,316 19,186,654 14,609,695 (1,203,874) 3,461,903 16,867,724
Beginning Balance 542,631,407 25,220,640 78,442,465 646,294,512 523,989,757 33,277,347 75,142,295 632,409,399
remained in Stage 1 at yearend 132,353,679 − − 132,353,679 236,942,301 − − 236,942,301
to Stages 2 and 3 at yearend − 5,895,447 3,434,267 9,329,714 − 5,181,394 8,909,564 14,090,958
Transfers to Stage 1 5,460,983 (2,472,968) (2,988,015) − 15,382,575 (6,454,553) (8,928,022) −
Transfers to Stage 2 (26,208,547) 54,884,254 (28,675,707) − (9,636,745) 10,801,608 (1,164,863) −
Transfers to Stage 3 (4,026,112) (5,376,670) 9,402,782 − (5,447,980) (5,981,148) 11,429,128 −
Accounts charged off − − (2,785,836) (2,785,836) − − (1,439,313) (1,439,313)
(Note 33) − − (5,972,562) (5,972,562) − − − −
movements (142,723,142) (1,211,222) (3,240,447) (147,174,811) (218,598,501) (11,604,008) (28,124) (230,230,633)
Ending Balance P
=507,488,268 P
=76,939,481 P
=47,616,947 P
=632,044,696 =P542,631,407 =
P25,220,640 =
P78,442,465 =P646,294,512
Parent Company
2022 2021
Corporate Loans
Beginning Balance P
=464,785,519 P
=24,852,656 P
=55,228,912 P
=544,867,087 P
=435,934,894 =
P30,214,439 =
P50,511,255 P
=516,660,588
to Stages 2 and 3 at yearend − 4,616,638 3,170,128 7,786,766 − 4,988,831 8,456,400 13,445,231
Transfers to Stage 1 2,181,944 (2,177,029) (4,915) − 11,276,501 (4,980,418) (6,296,083) −
Transfers to Stage 2 (25,259,322) 53,397,854 (28,138,532) − (7,469,151) 7,813,539 (344,388) −
Accounts charged off − − (48,784) (48,784) − − (1,100) (1,100)
(Note 33) − − (5,958,906) (5,958,906) − − − −
movements (128,846,725) (4,626,775) 1,144,160 (132,329,340) (194,349,797) (8,557,799) 2,371,315 (200,536,281)
Ending Balance 427,520,330 73,589,787 28,922,622 530,032,739 464,785,519 24,852,656 55,228,912 544,867,087
LGU
Beginning Balance 4,216,332 46,154 57,227 4,319,713 6,390,022 7,450 24,916 6,422,388
remained in Stage 1 at yearend 35,962 − − 35,962 108,593 − − 108,593
movements (1,499,080) (10,834) (569) (1,510,483) (2,282,283) 38,704 32,311 (2,211,268)
Ending Balance 2,753,214 35,320 56,658 2,845,192 4,216,332 46,154 57,227 4,319,713
(Forward)
*SGVFS169731*
- 92 -
Parent Company
2022 2021
Credit Cards
Beginning Balance P
=10,468,937 P
=269,413 P
=2,418,595 P
=13,156,945 =9,198,867
P =199,627
P =3,132,075
P =
P12,530,569
movements 2,147,359 (110,006) 144,713 2,182,066 1,049,072 (7,300) (58,600) 983,172
Ending Balance 13,157,391 315,914 909,376 14,382,681 10,468,937 269,413 2,418,595 13,156,945
Retail SMEs
to Stages 2 and 3 at yearend − 118,816 34,130 152,946 − 35,119 79,327 114,446
movements (2,881,696) 144,889 (118,225) (2,855,032) (4,925,444) (81,582) (356,407) (5,363,433)
Ending Balance 3,544,176 317,549 1,078,655 4,940,380 5,193,066 53,425 1,157,488 6,403,979
Housing Loans
Transferred loans – – – – – – – –
Transfers to Stage 1 2,076,403 (156,138) (1,920,265) – 1,840,598 (438,646) (1,401,952) –
Transfers to Stage 3 (1,196,361) (238,698) 1,435,059 – (1,798,685) (519,103) 2,317,788 –
movements (3,458,304) (121,191) (745,961) (4,325,456) 2,735,103 (30,572) 1,526,218 4,230,749
Ending Balance 18,020,708 640,238 9,002,446 27,663,392 19,118,020 486,743 10,417,506 30,022,269
Auto Loans
Transferred loans – – – – – – – –
movements (2,591,894) (92,662) (769,457) (3,454,013) (3,118,712) (144,749) (660,348) (3,923,809)
Ending Balance 5,017,858 102,192 1,970,284 7,090,334 5,868,366 162,915 2,733,492 8,764,773
Other Loans
Transfers to Stage 1 773,086 (43,098) (729,988) – 1,379,908 (552,924) (826,984) –
Transfers to Stage 2 (12,420) 181,997 (169,577) – (1,253,877) 1,419,173 (165,296) –
Transfers to Stage 3 (1,057,002) (2,473,557) 3,530,559 – (642,400) (183,343) 825,743 –
Accounts charged off – − - - – − (20,328) (20,328)
movements 1,051 2,544,541 (1,834,730) 710,862 (9,896,193) (1,867,179) (4,224,648) (15,988,020)
Ending Balance 9,039,529 1,546,924 1,976,100 12,562,553 5,855,851 367,134 1,152,059 7,375,044
Other Receivables
to Stages 2 and 3 as at year-end – 52,632 35,331 87,963 – 21,867 17,538 39,405
(Forward)
*SGVFS169731*
- 93 -
Parent Company
2022 2021
(Note 33) P
=– P
=– (P
=13,656) (P
=13,656) =–
P =–
P =–
P =–
P
movements 421,713 (502,587) 409,171 328,297 (1,274,938) (116,161) (667,553) (2,058,652)
Ending Balance 13,979,637 279,963 3,663,985 17,923,585 13,007,324 515,733 3,291,871 16,814,928
Beginning Balance 528,513,415 26,754,173 76,457,150 631,724,738 509,020,626 34,213,362 75,167,754 618,401,742
Transferred Loans – – – – – – – –
to Stages 2 and 3 as at year-end – 5,836,554 3,356,312 9,192,866 – 5,163,003 8,866,191 14,029,194
Transfers to Stage 1 5,478,724 (2,491,721) (2,987,003) − 15,294,898 (6,405,895) (8,889,003) −
Transfers to Stage 2 (26,203,660) 54,879,585 (28,675,925) − (9,411,770) 10,511,438 (1,099,668) −
(Note 33) – – (5,972,562) (5,972,562) – – – –
movements (136,707,576) (2,774,625) (1,770,898) (141,253,099) (212,063,192) (10,766,638) (2,037,712) (224,867,542)
Ending Balance P
=493,032,843 P
=76,827,887 P
=47,580,126 P
=617,440,856 =P528,513,415 =
P26,754,173 =
P76,457,150 = P631,724,738
17. Deposit Liabilities
17.1 Regulatory Reserve Requirements
As of December 31, 2022 and 2021, non-FCDU deposit liabilities are subject to reserves equivalent to
12.00% while peso-denominated LTNCDs are subject to reserves equivalent to 4.00%.
Available reserves booked under ‘Due from BSP’ amounted to =P74.7 billion and P
=81.3 billion as of
December 31, 2022 and 2021, respectively (refer to Note 7).
17.2 Information on LTNCDs
LTNCDs issued by the Parent Company consist of:
Interest Carrying Value

Repayment
Issue Date Maturity Date Face Value Coupon Rate Terms 2022 2021
October 11, 2019 April 11, 2025 =4,600,000
P 4.38% Quarterly P
=4,584,136 P4,578,946
=
February 27, 2019 August 27, 2024 8,220,000 5.75% Quarterly 8,198,193 8,187,523
October 26, 2017 April 26, 2023 6,350,000 3.88% Quarterly 6,347,683 6,339,910
April 27, 2017 October 27, 2022 3,765,000 3.75% Quarterly − 3,761,261
December 6, 2016 June 6, 2022 5,380,000 3.25% Quarterly − 5,377,750
=28,315,000
P P
=19,130,012 =28,245,390
P
17.3 Interest Expense on Deposit Liabilities

2022 2021 2020 2022 2021 2020
Time = 2,437,557
P =1,411,973
P =2,852,325
P = 2,434,206
P =1,411,974
P =2,852,325
P
Savings 1,589,891 1,942,687 2,930,115 1,605,241 2,014,705 2,778,153
LTNCDs 1,140,954 1,269,356 1,429,301 1,140,954 1,269,356 1,429,301
Demand 203,265 189,750 167,277 202,752 189,750 167,277
= 5,371,667
P =4,813,766
P =7,379,018
P = 5,383,153
P =4,885,785
P =7,227,056
P
*SGVFS169731*
- 94 -
As of December 31, 2022 and 2021, noninterest-bearing deposit liabilities amounted to = P27.8 billion
and =
P28.6 billion, respectively, for the Group, and =
P27.7 billion and P
=28.5 billion, respectively, for
the Parent Company.
The remaining deposit liabilities of the Group and the Parent Company generally earn annual fixed
interest rates ranging from:

2022 2021 2020 2022 2021 2020
Peso-denominated 0.10% - 6.12% 0.10% - 6.75% 0.10% - 10.00% 0.10% - 6.12% 0.10% - 5.00% 0.10% - 10.00%
Foreign currency-denominated 0.00% - 5.50% 0.01% - 3.00% 0.01% - 4.75% 0.00% - 5.50% 0.01% - 3.00% 0.01% - 4.75%
In 2022, 2021 and 2020, interest expense on LTNCDs for both the Group and the Parent Company
includes amortization of transaction costs amounting to =
P29.6 million, =
P33.4 million and
=59.9 million, respectively. Unamortized transaction costs of the LTNCDs amounted to
P
=40.0 million and =
P P69.6 million as of December 31, 2022 and 2021, respectively.
18. Financial Liabilities at Fair Value Through Profit or Loss
As of December 31, 2022 and 2021, this account consists of currency forwards with negative fair
values amounting to =
P1.0 billion and =P891.5 million, respectively, for the Group, and
=1.0 billion and =
P P891.3 million, respectively, for the Parent Company (refer to Notes 23 and 35).
19. Bills and Acceptances Payable
19.1 Information on Bills and Acceptances Payable

2022 2021 2022 2021
Bills payable to:
Foreign banks P
=6,665,834 P8,263,434
= P
=6,609,593 P7,849,009
=
BSP and local banks (Note 33) 1,036,491 37,482,381 395 36,154,113
Others − 98,086 − −
7,702,325 45,843,901 6,609,988 44,003,122
Acceptances outstanding (Note 10) 7,278,048 7,109,896 7,278,047 7,109,896
P
=14,980,373 =52,953,797
P P
=13,888,035 =51,113,018
P
As of December 31, 2022 and 2021, bills payable with a carrying amount of = P6.6 billion and
=38.5 billion are secured by a pledge of financial assets at FVOCI with fair values of =
P P2.5 billion and
=32.8 billion, respectively, and investment securities at amortized cost with carrying values of
P
=5.5 billion and =
P P5.3 billion, respectively, and fair values of P
=5.5 billion and =
P5.6 billion,
respectively (refer to Notes 9.2 and 9.3).
*SGVFS169731*
- 95 -
19.2 Interest Expense on Bills Payable and Other Borrowings

2022 2021 2020 2022 2021 2020
Bills payable P229,600
= P
=391,404 P
=663,567 P163,385
= P
=315,097 P
=482,810
Lease liabilities (Note 29) 171,885 112,591 120,675 170,692 107,052 120,181
Others 32,488 7,926 62,198 29,467 2,931 34,487
433,973 511,921 846,440 363,544 425,080 637,478
Lease liabilities − 3,528 2,900 − − −
= 433,973
P P
=515,449 P
=849,340 = 363,544
P P
=425,080 P
=637,478
Bills payable of the Group and the Parent Company earn annual fixed interest rates ranging from:

2022 2021 2020 2022 2021 2020
Peso-denominated 1.9%- 5.5% 1.0% - 2.0% 4.0% - 6.5% 1.9%- 5.5% 1.0% - 2.0% 4.0% - 6.5%
Foreign currency-denominated 0.3%- 4.3% 0.1% - 1.2% 0.1% - 4.4% 0.3%- 4.3% 0.1% -1.2 % 0.1% - 4.4%
20. Accrued Taxes, Interest and Other Expenses

2022 2021 2022 2021
Accrued taxes and other expenses P
=8,131,353 =7,106,616
P P
=7,523,206 =6,865,474
P
Accrued interest (Note 33) 986,040 659,034 964,494 638,907
P
=9,117,393 =7,765,650
P P
=8,487,700 =7,504,381
P
Accrued taxes and other expenses consist of:

2022 2021 2022 2021
Financial liabilities:
Promotional expenses P
=1,354,700 P802,454
= P
=1,354,700 P802,454
=
Information technology-related expenses 583,844 541,510 583,844 541,510
Rent and utilities payable 501,319 362,868 494,591 359,805
Management, directors and other
professional fees 262,753 285,648 236,466 263,133
Repairs and maintenance 160,350 85,128 159,976 83,762
2,862,966 2,077,608 2,829,577 2,050,664
Nonfinancial liabilities:
Monetary value of leave credits 1,532,890 1,920,153 1,490,640 1,878,856
PDIC insurance premiums 879,310 970,140 863,832 954,662
Other taxes and licenses 854,359 477,917 724,002 428,290
Employee benefits 583,136 443,886 561,179 421,505
Other expenses 1,418,692 1,216,912 1,053,976 1,131,497
5,268,387 5,029,008 4,693,629 4,814,810
P
=8,131,353 =7,106,616
P P
=7,523,206 =6,865,474
P
‘Other expenses’ include janitorial, representation and entertainment, communication and other
operating expenses.
*SGVFS169731*
- 96 -
21. Bonds Payable
Interest Carrying Value

Coupon Repayment
Issue Date Maturity Date Face Value Rate Terms 2022 2021
Fixed rate medium term senior notes
June 27, 2019 September 27, 2024 USD750,000 3.28% Semi-annually P
=41,722,415 P38,117,754
=
April 26, 2018 April 27, 2023 300,000 4.25% Semi-annually 16,716,682 15,265,667
USD1,050,000 P
=58,439,097 =53,383,421
P
The fixed rate medium term senior notes are drawdowns from the Parent Company’s Medium Term
Note Programme (the MTN Programme), which was established on April 13, 2018 with an initial
nominal size of US$1.0 billion. On June 14, 2019, the Parent Company increased the size of its MTN
Programme to US$2.0 billion. Both issued fixed rate medium term senior notes are listed in the
Singapore Exchange Securities Trading Limited. As of December 31, 2022 and 2021, the
unamortized transaction costs of bonds payable amounted to = P92.8 million and =
P168.7 million,
respectively. In 2022 and 2021, amortization of transaction costs amounting to =
P75.9 million and
=83.5 million, were charged to ‘Interest expense on bonds payable’ in the statements of income.
P
22. Other Liabilities

2022 2021 2022 2021
Financial
Accounts payable =
P5,036,170 =4,724,720
P P
=4,564,107 P4,285,545
=
Dormant credits 1,591,380 1,303,713 1,553,892 1,272,553
Manager’s checks and demand drafts
outstanding 1,548,448 1,256,121 1,548,448 1,256,121
Bills purchased - contra (Note 10) 877,767 1,053,517 877,767 1,053,517
Accounts payable - electronic money 315,290 408,858 315,290 408,858
Due to other banks (Note 33) 276,770 154,949 82,132 52,198
Margin deposits and cash letters of credit 224,033 325,829 211,196 314,326
Payment order payable 220,949 196,718 220,949 196,206
Deposits on lease contracts 75,129 593,903 30,364 53,774
Transmission liability 40,280 58,308 – –
Deposit for keys on safety deposit boxes 16,167 16,742 16,167 16,742
10,222,383 10,093,378 9,420,312 8,909,840
Nonfinancial
Provisions (Notes 12 and 34) 1,107,015 1,095,325 1,367,067 685,230
Due to Treasurer of the Philippines 891,709 882,769 891,709 882,769
Deferred revenue - Credit card-related 646,361 548,630 646,361 548,630
Deferred revenue - Bancassurance (Note 12) 500,474 573,674 500,474 573,674
Retirement benefit liability (Note 28) 384,838 926,259 382,449 923,116
Withholding tax payable 310,530 309,897 309,363 304,039
Deferred tax liabilities (Note 30) 165,721 165,228 – –
SSS, Philhealth, Employer’s compensation
premiums and Pag-IBIG contributions
payable 48,081 43,359 47,797 42,989
Miscellaneous 1,550,528 1,081,353 528,273 642,564
5,605,257 5,626,494 4,673,493 4,603,011
P
=15,827,640 =15,719,872
P P
=14,093,805 =13,512,851
P
*SGVFS169731*
- 97 -
‘Deferred revenue - Bancassurance’ pertains to the allocated portion of the consideration received for
the disposal of APLII related to the EDR and the exclusive bancassurance arrangement for the non-
life insurance business with ABIC (refer to Note 12.7). In 2022 and 2021, amortization of other
deferred revenue amounting to = P73.2 million were recognized under ‘Service fees and commission
income’ (refer to Note 26.1).
‘Miscellaneous’ include interoffice floats, remittance-related payables, overages, advance rentals and
sundry credits.
23. Derivative Financial Instruments
The tables below show the fair values of the derivative financial instruments entered into by the
Group and the Parent Company, recorded as ‘Financial assets at FVTPL’ (refer to Note 9.1) or
‘Financial liabilities at FVTPL’ (refer to Note 18), together with the notional amounts.
The notional amount is the amount of a derivative’s underlying asset, reference rate or index and is
the basis upon which changes in the value of derivatives are measured. The notional amounts
indicate the volume of transactions outstanding as of December 31, 2022 and 2021 and are not
indicative of either market risk or credit risk (amounts in thousands, except average forward rate).
Consolidated
2022
Average Notional
Assets Liabilities Forward Rate* Amount*
Currency forwards and spots:
BUY:
USD P
= 749,512 P
= 760,764 55.76 P
= 1,539,816
SGD 303 – 0.74 7
EUR 243 57,543 1.06 72,318
HKD 172 – 0.13 24
SELL:
USD 604,222 65 55.76 644,843
EUR 3,803 70,519 1.06 62,040
GBP 2,765 – 1.20 2,000
NZD 319 – 0.63 400
JPY 216 11,911 0.01 534,700
PHP 200 138,260 1.00 2,743,406
HKD 187 236 0.13 321,189
AUD 9 55 0.67 700
SGD – 348 0.74 1,700
CAD – 75 0.73 1,700
P
= 1,361,951 P
= 1,039,776
*The notional amounts and average forward rates pertain to original currencies.
Consolidated
2021
Average Notional
BUY:
USD =1,355,660
P =274
P 51.00 =3,861,673
P
GBP 47 16 1.35 6,325
SGD 31 – 0.74 1
EUR 6 5 1.13 12,645
PHP – 1,544 1.00 1,788,750
(Forward)
*SGVFS169731*
- 98 -
Consolidated
2021
Average Notional
SELL:
JPY =6,124
P =9
P 0.01 1,080,000
HKD 1,714 108 0.13 2,217,580
USD 990 887,819 51.00 1,374,345
PHP 290 8 1.00 509,708
CAD 141 11 0.78 2,125
GBP 30 884 1.35 8,500
SGD 16 436 0.74 1,400
EUR 2 153 1.13 19,443
AUD – 228 0.72 500
NZD – 36 0.68 400
P
=1,365,051 P
=891,531
Parent Company
2022
Average Notional
BUY:
USD P
= 748,234 P
= 760,764 55.76 P
= 1,225,921
SGD 303 – 0.74 7
EUR – 57,543 1.06 67,540
SELL:
USD 603,979 65 55.76 640,066
EUR 3,803 70,519 1.06 62,040
GBP 2,765 – 1.20 2,000
NZD 319 – 0.63 400
JPY 216 11,911 0.01 534,700
PHP 200 138,260 1.00 2,743,406
AUD 9 55 0.67 700
SGD – 348 0.74 1,700
HKD – 236 0.13 5,000
CAD – 75 0.73 1,700
P
= 1,359,828 P
= 1,039,776
Parent Company
2021
Average Notional
BUY:
USD =1,354,160
P =185
P 51.00 =1,652,850
P
GBP 47 16 1.35 6,325
EUR 2 – 1.13 50
SGD 31 – 0.74 1
PHP – 1,544 1.00 1,788,750
SELL:
JPY 6,124 9 0.01 1,080,000
USD 986 887,816 51.00 1,361,750
PHP 290 8 1.00 509,708
HKD 214 26 0.13 24,700
CAD 141 11 0.78 2,125
GBP 30 884 1.35 8,500
SGD 16 436 0.74 1,400
AUD – 228 0.72 500
EUR – 147 1.13 3,500
NZD – 36 0.68 400
=1,362,041
P =891,346
P
*SGVFS169731*
- 99 -
The rollforward analysis of net derivative assets (liabilities) in 2022 and 2021 follows:

2022 2021 2022 2021
Balance at the beginning of the year:
Derivative assets P
= 1,365,051 =370,653
P P
= 1,362,041 P
=365,558
Derivative liabilities 891,531 701,239 891,346 700,802
473,520 (330,586) 470,695 (335,244)
Changes in fair value
Currency forwards and spots* (147,028) 805,748 (147,028) 806,069
Interest rate swaps and warrants** – (23,472) – (23,472)
(147,028) 782,276 (147,028) 782,597
Net availments (settlements) (4,317) 21,830 (3,615) 23,342
Balance at end of year:
Derivative assets P1,361,951
= P
=1,365,051 P
= 1,359,828 P
=1,362,041
Derivative liabilities 1,039,776 891,531 1,039,776 891,346
P
= 322,175 =473,520
P P
= 320,052 P
=470,695
* Presented as part of ‘Foreign exchange gains - net’
** Recorded under ‘Trading and investment securities gains - net’ (refer to Note 9.5)
24. Maturity Analysis of Assets and Liabilities
The following tables show an analysis of assets and liabilities of the Group and Parent Company
analyzed according to whether they are expected to be recovered or settled within one year and
beyond one year from reporting date:
Consolidated
2022 2021
Less than Over Less than Over
Twelve Twelve Twelve Twelve
Months Months Total Months Months Total
Financial Assets
Cash and other cash items = 22,217,915
P =–
P = 22,217,915
P P27,552,773
= =–
P P27,552,773
=
Due from BSP 94,701,360 – 94,701,360 161,001,912 – 161,001,912
Due from other banks 26,020,081 – 26,020,081 27,232,676 – 27,232,676
Interbank loans receivable (Note 8) 16,291,470 – 16,291,470 32,112,667 – 32,112,667
Securities held under agreements to
resell (Note 8) 64,526,051 – 64,526,051 15,800,317 – 15,800,317
Financial assets at FVTPL (Note 9) 7,347,201 – 7,347,201 11,167,657 – 11,167,657
Financial assets at FVOCI (Note 9) 86,697,820 71,485,705 158,183,525 75,692,741 92,294,549 167,987,290
(Note 9) 35,359,598 78,956,212 114,315,810 45,931,953 47,346,056 93,278,009
Loans and receivables (Note 10) 225,461,251 407,109,088 632,570,339 200,773,178 445,914,712 646,687,890
Other assets (Note 15) 51,331 19,000 70,331 136,324 13,698 150,022
578,674,078 557,570,005 1,136,244,083 597,402,198 585,569,015 1,182,971,213
Nonfinancial Assets
Property and equipment (Note 11) – 25,882,025 25,882,025 – 25,846,442 25,846,442
Investment in an associate (Note 12) – 2,688,764 2,688,764 – 2,468,107 2,468,107
Investment properties (Note 13) – 17,808,697 17,808,697 – 14,658,030 14,658,030
Deferred tax assets (Note 30) – 6,616,902 6,616,902 – 6,405,505 6,405,505
Goodwill (Note 14) – 11,221,410 11,221,410 – 13,375,407 13,375,407
Intangible assets (Note 14) – 7,770,695 7,770,695 – 6,995,365 6,995,365
Residual value of leased assets
(Note 10) 107,634 122,772 230,406 505,784 219,082 724,866
Other assets (Note 15) 2,945,525 2,181,506 5,127,031 4,041,342 1,685,772 5,727,114
3,053,159 74,292,771 77,345,930 4,547,126 71,653,710 76,200,836
Less: Allowance for impairment and
credit losses (Note 16) 47,192,482 49,780,665
Unearned and other deferred
income (Note 10) 756,049 1,118,244
Accumulated depreciation and
amortization (Notes 11, 13
and 14) 20,484,406 17,488,478
=
P1,145,157,076 P
=1,190,784,662
(Forward)
*SGVFS169731*
- 100 -
Consolidated
2022 2021
Deposit liabilities (Note 17) P850,430,921
= = 20,796,800
P P
= 871,227,721 =856,415,554
P =38,508,755
P P
=894,924,309
Financial liabilities at FVTPL (Note 18) 1,039,776 – 1,039,776 891,531 – 891,531
Bills and acceptances payable (Note 19) 11,867,176 3,113,197 14,980,373 49,780,354 3,173,443 52,953,797
Accrued interest payable (Note 20) 980,446 5,594 986,040 657,063 1,971 659,034
Accrued other expenses payable
(Note 20) 2,384,652 478,314 2,862,966 1,657,913 419,695 2,077,608
Bonds payable (Note 21) 16,716,682 41,722,415 58,439,097 – 53,383,421 53,383,421
Other liabilities (Note 22) 8,437,866 1,784,517 10,222,383 7,704,872 2,388,506 10,093,378
891,857,519 67,900,837 959,758,356 917,107,287 97,875,791 1,014,983,078
Nonfinancial Liabilities
Lease liabilities (Note 29) 709,214 2,927,177 3,636,391 2,698,373 1,067,018 3,765,391
Accrued taxes and other expenses
(Note 20) 3,069,330 2,199,057 5,268,387 2,288,247 2,740,761 5,029,008
Income tax payable 983,051 – 983,051 157,735 – 157,735
7,488,804 8,004,282 15,493,086 7,708,595 6,870,033 14,578,628
= 899,346,323
P = 75,905,119
P P
= 975,251,442 =924,815,882
P =
P104,745,824 =
P1,029,561,706
Parent Company
2022 2021
Financial Assets
Cash and other cash items = 22,103,095
P =–
P = 22,103,095
P P27,454,459
= =–
P P27,454,459
=
Due from BSP 94,701,360 – 94,701,360 161,001,912 – 161,001,912
Due from other banks 17,609,247 – 17,609,247 19,333,873 – 19,333,873
Interbank loans receivable (Note 8) 14,736,112 – 14,736,112 30,302,334 – 30,302,334
Securities held under agreements to
resell (Note 8) 64,526,051 – 64,526,051 15,800,317 – 15,800,317
Financial assets at FVTPL (Note 9) 7,195,685 – 7,195,685 11,010,278 – 11,010,278
Financial assets at FVOCI (Note 9) 86,716,076 70,489,831 157,205,907 75,706,122 91,840,228 167,546,350
(Note 9) 35,359,598 78,816,930 114,176,528 45,814,197 47,335,863 93,150,060
Loans and receivables (Note 10) 214,331,618 403,721,820 618,053,438 193,490,020 439,091,126 632,581,146
Other assets (Note 15) 49,981 1,479 51,460 134,840 1,502 136,342
557,328,823 553,030,060 1,110,358,883 580,048,352 578,268,719 1,158,317,071
Nonfinancial Assets
Property and equipment (Note 11) – 23,667,261 23,667,261 – 23,444,821 23,444,821
Investment in subsidiaries and an
associate (Note 12) – 20,384,104 20,384,104 – 27,275,451 27,275,451
Investment properties (Note 13) – 17,104,160 17,104,160 – 13,949,148 13,949,148
Deferred tax assets (Note 30) – 6,574,190 6,574,190 – 6,271,578 6,271,578
Goodwill (Note 14) – 11,361,768 11,361,768 – 13,515,765 13,515,765
Intangible assets (Note 14) – 8,712,778 8,712,778 – 7,969,658 7,969,658
Other assets (Note 15) 2,328,923 2,043,660 4,372,583 3,761,622 1,673,606 5,435,228
2,328,923 89,847,921 92,176,844 3,761,622 94,100,027 97,861,649
Less: Allowance for impairment and
credit losses (Note 16) 47,652,020 49,612,865
Unearned and other deferred
income (Note 10) 612,582 856,408
Accumulated amortization and
depreciation (Notes 11, 13
and 14) 20,526,875 17,698,795
=
P1,133,744,250 P
=1,188,010,652
Deposit liabilities (Note 17) P846,551,824
= = 20,078,556
P = 866,630,380
P =861,706,050
P =37,819,145
P =899,525,195
P
Financial liabilities at FVTPL (Note 18) 1,039,776 – 1,039,776 891,346 – 891,346
Bills and acceptances payable (Note 19) 10,818,915 3,069,120 13,888,035 48,305,700 2,807,318 51,113,018
Accrued interest payable (Note 20) 964,494 – 964,494 638,907 – 638,907
Accrued other expenses payable
(Note 20) 2,351,263 478,314 2,829,577 1,630,969 419,695 2,050,664
(Forward)
*SGVFS169731*
- 101 -
Parent Company
2022 2021
Bonds payable (Note 21) = 16,716,682
P = 41,722,415
P = 58,439,097
P =–
P =53,383,421
P =53,383,421
P
886,109,479 67,102,192 953,211,671 920,081,999 96,430,392 1,016,512,391
Nonfinancial Liabilities
Lease liabilities (Note 29) 676,900 2,927,177 3,604,077 2,686,906 1,011,504 3,698,410
Accrued taxes and other expenses
(Note 20) 2,507,506 2,186,123 4,693,629 2,086,159 2,728,651 4,814,810
Income tax payable 916,235 – 916,235 89,328 – 89,328
5,632,435 8,254,999 13,887,434 6,400,614 6,804,945 13,205,559
= 891,741,914
P = 75,357,191
P P
= 967,099,105 =926,482,613
P =
P103,235,337 =
P1,029,717,950
25. Equity
25.1 Capital Stock
This account consists of (amounts in thousands, except for par value and number of shares):
Shares Amount
Common - P = 40 par value
Authorized 1,750,000,001 =70,000,000
P
Issued and outstanding
Balance at the beginning and end of the year 1,525,764,850 =61,030,594
P
The history of share issuances of the Parent Company since its initial public offering follows:
Number of Par Offer

Date Type of issuance common shares value price
July 2019 Stock rights 276,625,172 =40.00
P =43.38
P
February 2014 Stock rights 162,931,262 40.00 71.00
February 2013 Share-for-share swap with ABC 423,962,500 40.00 97.90
common and preferred shares
September 2000 Pre-emptive stock rights 71,850,215 100.00 60.00
September 1999 Stock rights 68,740,086 100.00 137.80
December 1995 Third public offering 7,200,000 100.00 260.00
April 1992 Second public offering 8,033,140 100.00 265.00
June 1989 Initial public offering 10,800,000 100.00 100.00
In January 2013, the SEC approved the conversion of the Parent Company’s 195,175,444 authorized
preferred shares into common shares, thereby increasing its authorized common shares to
1,250,000,001.
The Parent Company’s shares are listed in the PSE. As of December 31, 2022 and 2021, the Parent
Company had 36,192 and 36,286 stockholders, respectively.
On July 22, 2019, the Parent Company successfully completed its Stock Rights Offering (SRO) of
276,625,172 common shares with a par value of = P40.0 per share at a price of =
P43.38 each, raising
gross proceeds of =
P12.0 billion. Out of the total transaction costs from the SRO, underwriting fees
amounting to =
P10.0 million paid to PNB Capital, being one of the joint lead managers, was
eliminated against ‘Capital Paid in Excess of Par Value’ in the consolidated financial statements.
*SGVFS169731*
- 102 -
25.2 Surplus
The computation of surplus available for dividend declaration in accordance with SEC Memorandum
Circular No. 11-2008 differs to a certain extent from the computation following BSP guidelines.
As of December 31, 2022 and 2021, surplus amounting to = P9.6 billion, representing the balances of
the following equity items that have been applied to eliminate the Parent Company’s deficit through
quasi-reorganizations in 2002 and 2000, is not available for dividend declaration without prior
approval from the SEC and the BSP:
Revaluation increment on land and buildings =7,691,808

P
Accumulated translation adjustment 1,315,685
Accumulated equity in net earnings of investees 563,048
=9,570,541
P
25.3 Surplus Reserves
2022 2021
Reserves under BSP Circular 1011 (Note 10) P
=4,218,928 =4,461,857
P
Reserves for trust business (Note 32) 630,314 605,583
Reserves for self-insurance 80,000 80,000
P
=4,929,242 =5,147,440
P
‘Reserves under BSP Circular 1011’ represents the appropriation for the excess of 1.00% general loan
loss provisions over the computed ECL for Stage 1 accounts in accordance with BSP Circular 1011.
‘Reserves for self-insurance’ represents the amount set aside to cover losses due to fire or defalcation
by, and other unlawful acts of, the Parent Company’s personnel or third parties.
25.4 Accumulated Translation Adjustment
As part of the Group’s rehabilitation program in 2002, the SEC approved on November 7, 2002 the
application of the accumulated translation adjustment of =P1.6 billion to eliminate the Parent
Company’s remaining deficit of = P1.3 billion, including =
P0.6 billion accumulated equity in net
earnings as of December 31, 2001, after applying the total reduction in par value amounting to
=7.6 billion.
P
The SEC approval is subject to the following conditions:

 remaining translation adjustment of = P310.7 million as of December 31, 2001 (shown as part of
‘Capital paid in excess of par value’ in the statement of financial position) will not be used to
wipe out losses that may be incurred in the future without prior approval of SEC;
 for purposes of dividend declaration, any future surplus account of the Parent Company shall be
restricted to the extent of the deficit wiped out by the translation adjustment.
*SGVFS169731*
- 103 -
25.5 Other Equity Reserves
On August 26, 2016, the Parent Company’s BOD approved the grant of centennial bonus to its
employees, officers and directors on record as of July 22, 2016, in the form of the Parent Company’s
shares of stock. The acquisition and distribution of the estimated 3.0 million shares shall be done
over a period of five years, and are subject to service conditions. The grant is accounted for as
equity-settled share-based payments. Grant date is April 27, 2017 when the fair value of the
centennial bonus shares is P=65.20. In 2021 and 2020, the Parent Company awarded 306 thousand and
316 thousand, respectively, centennial bonus shares and applied the settlement of the awards against
‘Other equity reserves’ amounting to = P29.0 million and =P6.4 million, respectively.
25.6 Capital Management
The primary objectives of the Group’s capital management are to ensure that it complies with
externally imposed capital requirements and it maintains strong credit ratings and healthy capital
ratios in order to support its business and to maximize shareholders’ value.
The Parent Company and its financial allied subsidiaries are subject to the regulatory requirements of
the BSP. The Group manages its capital structure and makes adjustments to it in the light of changes
in economic conditions and the risk characteristics of its activities. In order to maintain or adjust the
capital structure, the Parent Company may adjust the amount of dividend payment to shareholders,
return capital structure, or issue capital securities. No changes were made in the objectives, policies
and processes from the previous periods. The Group has complied with all externally imposed capital
requirements throughout the year.
25.6.1 BSP Reporting for Capital Management
Under existing BSP regulations, the determination of the Group’s compliance with regulatory
requirements and ratios is based on the amount of the Group’s unimpaired capital (regulatory net
worth) reported to the BSP, which is determined based on RAP, which differ from PFRS in some
respects. In addition, the risk-based capital ratio of a bank or Capital Adequacy Ratio (CAR),
expressed as a percentage of qualifying capital to risk-weighted assets, should not be less than
10.00% at all times for both solo basis (head office and branches) and consolidated basis (Parent
Company and subsidiaries engaged in financial allied undertakings but excluding insurance
companies). Qualifying capital and risk-weighted assets are computed based on RAP. Risk-weighted
assets consist of total assets less cash on hand, due from BSP, loans covered by hold-out on or
assignment of deposits, loans or acceptances under letters of credit to the extent covered by margin
deposits and other non-risk items determined by the MB of the BSP.
On May 16, 2002, the BSP approved the booking of additional appraisal increment on properties of
=
P431.8 million and recognition of the same in determining the CAR, and booking of translation
adjustment of =P1.6 billion representing the increase in peso value of the investment in foreign
subsidiaries for purposes of the quasi-reorganization and rehabilitation of the Parent Company,
provided that the same shall be excluded for dividend purposes.
On August 29, 2019, the MB of the BSP approved the integration of PNBSB with the Parent
Company. One of the integration incentives granted by the BSP was a temporary capital relief by not
deducting the amount of investment of the Parent Company in PNBSB from CET1 Capital in
computing the CAR on a solo basis. The relief commenced on the date of net asset transfer and shall
become effective until approval by the SEC of the reduction of authorized capital stock of PNBSB.
*SGVFS169731*
- 104 -
As of December 31, 2022 and 2021, CAR reported to the BSP with certain adjustments is shown in
the table below (amounts, except ratios, are expressed in millions):
2022 2021
Consolidated Actual Required Actual Required
CET1 Capital (Gross) =158,834
P =152,857
P
Less: Regulatory Adjustments to CET 1 48,221 48,541
CET1 Capital (Net) / Tier 1 Capital 110,613 104,316
Add: Tier 2 Capital 6,109 5,634
Total qualifying capital =116,722
P =75,873
P =109,950
P =80,490
P
Total risk-weighted assets =758,730
P =804,903
P
Tier 1 capital ratio 14.58% 12.96%
Total capital ratio 15.38% 13.66%
2022 2021
Parent Company Actual Required Actual Required
CET1 Capital (Gross) =154,537
P =149,117
P
Less: Regulatory Adjustments to CET 1 61,587 61,982
CET1 Capital (Net) / Tier 1 Capital 92,950 87,135
Add: Tier 2 Capital 5,878 5,442
Total qualifying capital =98,828
P =73,356
P =92,577
P =79,135
P
Total risk-weighted assets =733,556
P =791,349
P
Tier 1 capital ratio 12.67% 11.01%
Total capital ratio 13.47% 11.70%
The Group considered BSP regulations, which set out a minimum CET1 ratio of 6.00% and Tier 1
capital ratio of 7.50%, and require capital conservation buffer of 2.50% comprised of CET1 capital.
In line with its ICAAP document, the Parent Company maintains a capital level that not only meets
the BSP’s CAR requirement, but also covers all material risks that it may encounter in the course of
its business. The ICAAP process highlights close integration of capital planning and strategic
management with risk management. The Parent Company has in place a risk management framework
that involves a collaborative process for assessing and managing identified Pillar 1 and Pillar 2 risks.
The Parent Company complies with the required annual submission of updated ICAAP.
25.6.2 BSP Reporting for Basel III Leverage Ratio
BSP also requires the Basel III Leverage Ratio (BLR), which is designed to act as a supplementary
measure to the risk-based capital requirements. BLR intends to restrict the build-up of leverage in the
banking sector to avoid destabilizing deleveraging processes, which can damage the broader financial
system and the economy. Likewise, it reinforces the risk-based requirements with a simple, non-risk
based “backstop” measure. BLR is computed as the capital measure (Tier 1 capital) divided by the
total exposure measure and should not be less than 5.00%.
As of December 31, 2022 and 2021, BLR reported to the BSP with certain adjustments is shown in
the table below (amounts, except ratios, are expressed in millions):

2022 2021 2022 2021
Tier 1 capital P
=110,613 =104,316
P P
=92,950 =87,135
P
Total exposure measure 1,176,190 1,189,481 1,150,463 1,171,530
BLR 9.40% 8.77% 8.08% 7.44%
BLR is computed based on RAP.
*SGVFS169731*
- 105 -
26. Other Operating Income
26.1 Service Fees and Commission Income

2022 2021 2020 2022 2021 2020
Deposit-related P
=1,585,441 P1,326,692
= P1,058,033
= P
=1,585,441 P1,326,692
= P1,054,359
=
Loan-related 1,122,258 1,432,909 1,072,459 1,114,379 1,425,149 1,124,608
Underwriting fees 1,032,640 511,032 227,494 – – –
Bancassurance (Note 22) 873,039 495,512 206,686 873,039 495,512 206,686
Remittance (Note 33) 680,875 652,262 646,494 357,161 351,392 340,364
Credit card-related 669,862 697,962 622,302 669,862 697,962 622,302
Interchange fees 458,456 383,271 329,059 458,456 383,271 329,059
Trust fees (Note 32) 317,782 319,422 314,851 317,782 319,422 314,851
Miscellaneous 257,256 521,264 207,194 187,249 311,329 142,290
6,997,609 6,340,326 4,684,572 5,563,369 5,310,729 4,134,519
Discontinued operations:
Miscellaneous (Note 36) − 110 19,718 − − −
P
=6,997,609 =6,340,436
P =4,704,290
P P
=5,563,369 =5,310,729
P =4,134,519
P
‘Credit card-related fees’ and ‘Interchange fees’ were generated from the credit card business of the
Parent Company.
‘Miscellaneous’ includes income from securities brokering activities and other fees and commission.
26.2 Net Gains on Sale or Exchange of Assets

2022 2021 2020 2022 2021 2020
Net gains from sale of investment properties P
=5,703,909 =15,192
P =11,775 P
P =5,701,642 =8,268
P =11,806
P
Net gains from foreclosure and
repossession of investment properties 1,751,739 138,697 72,109 1,751,739 138,697 13,209
Net gains from sale of other assets 241,807 52,206 − 241,807 60,880 −
Net gains from sale of receivables 42,786 766,968 104,181 42,786 766,968 104,181
Net gains (losses) from sale of property and
equipment (Note 11) 34,913 8,399 7,777 32,027 (789) 1,297
P
=7,775,154 =981,462
P =195,842 P
P =7,770,001 =974,024
P =130,493
P
In September 2021, the Parent Company sold certain NPLs with aggregate outstanding balances
before sale, including accrued interest, of =
P5.5 billion, resulting in a gain from sale of receivables of
=767.0 million.
P
*SGVFS169731*
- 106 -
27. Miscellaneous Income and Expenses
27.1 Miscellaneous Income

2022 2021 2020 2022 2021 2020
Recoveries P
=303,435 P85,164
= P33,000
= P
=221,253 P84,463
= P24,685
=
Rental income (Notes 29 and 33) 275,865 513,904 680,332 47,345 211,775 383,733
Miscellaneous - Loan-related 205,253 25,763 29,224 205,253 25,763 29,224
Income from assets acquired 95,736 183,173 258,708 95,736 183,173 253,128
Dividends 51,211 63,608 86,139 11,139 23,584 45,811
Miscellaneous - Credit card-related 12,605 15,912 8,812 12,605 15,912 8,812
Referral fees 3,301 2,491 3,188 – – –
Miscellaneous - Trade-related 351 188 17,055 351 188 17,055
Others 188,935 179,844 128,241 127,751 214,968 144,304
1,136,692 1,070,047 1,244,699 721,433 759,826 906,752
Rental income − 375,556 − − − −
Others − 111,401 243,860 − − −
− 486,957 243,860 − − −
P
=1,136,692 =1,557,004
P =1,488,559
P P
=721,433 =759,826
P =906,752
P
‘Others’ consist of income from wire transfers, tellers’ overages, and penalty payments received by
the Group which are related to loan accounts.
27.2 Miscellaneous Expenses

2022 2021 2020 2022 2021 2020
Secretarial, janitorial and messengerial P
=1,790,422 P1,682,794
= P1,631,137
= P1,779,543
= P1,669,906
= P1,605,223
=
Insurance 1,778,214 1,997,478 1,833,686 1,763,300 1,983,103 1,787,331
Information technology 1,193,975 1,304,930 1,448,623 1,165,865 1,283,294 1,431,600
Marketing expenses 1,070,147 719,070 737,110 1,063,239 713,832 732,788
Litigation and assets acquired expenses
(Note 13) 373,740 395,386 248,302 373,549 394,534 243,489
Travelling 339,868 284,484 289,765 333,898 280,090 282,758
Management and other professional fees 279,363 294,090 363,710 220,880 245,853 291,457
Stationery and supplies 269,669 269,813 265,226 260,333 261,679 255,914
Common use service area (CUSA)
charges (Note 33) 188,770 − − 188,770 − −
Postage, telephone and cable 156,800 151,560 163,160 127,895 124,270 125,244
Entertainment, amusement and
recreation (EAR) (Note 30) 154,987 189,098 147,421 145,423 181,251 137,152
Value-added tax on leases 141,988 88,116 − 141,988 88,116 −
Repairs and maintenance 79,303 70,375 62,161 79,303 70,375 62,161
Freight 41,599 42,418 30,973 41,547 42,320 29,428
Fuel and lubricants 16,301 14,172 14,157 13,751 11,477 10,931
Loss on loan modifications − − 1,587,605 − − 1,587,605
Others (Note 33) 176,796 698,971 190,403 111,146 624,455 54,893
8,051,942 8,202,755 9,013,439 7,810,430 7,974,555 8,637,974
(Forward)
*SGVFS169731*
- 107 -

2022 2021 2020 2022 2021 2020
Discontinued operations:
Management and other professional fees
(Note 33) P
=− =109,776
P =1,843
P P
=– P–
= P–
=
Insurance − 10,363 457 – – –
Information technology − 2,906 6,918 – – –
Marketing expenses − 2,236 8,514 – – –
Secretarial, janitorial and messengerial − 1,620 6,015 – – –
Postage, telephone and cable − 751 3,232 – – –
Travelling − 508 2,390 – – –
Stationery and supplies − 449 2,090 – – –
Fuel and lubricants − 411 2,327 − − −
EAR − 142 2,575 – – –
Others − 2,832 8,649 – – –
− 131,994 45,010 − − −
P
=8,051,942 =8,334,749
P =9,058,449
P P
=7,810,430 =7,974,555
P =8,637,974
P
‘Loss on loan modifications’ pertains to the adjustment for the changes in expected cash flows of
credit exposures, as a result of modifications in the original terms and conditions of the loan which
include, but not limited to, changes in interest rates, principal amount, maturity date, and payment
terms. The Group accommodated modifications in the terms and conditions of certain loans of
borrowers, which have been directly impacted by the COVID-19 pandemic. The loss is computed as
the difference between the gross carrying amount of the loan and the present value of the modified
contractual cash flows, discounted at the original effective interest rate of the loan. Subsequent
accretion to interest income in 2022 and 2021 amounted to P =369.2 million and = P351.5 million,
respectively.
‘Others’ include stationery and supplies used, donation, fines, penalties, periodicals, magazines and
other charges.
28. Retirement Plan
The Parent Company and certain subsidiaries of the Group have separate funded, noncontributory
defined benefit retirement plans covering substantially all its officers and regular employees. Under
these retirement plans, all covered officers and employees are entitled to cash benefits after satisfying
certain age and service requirements.
The amounts of net defined benefit liability in the statements of financial position follow:

2022 2021 2022 2021
Retirement benefit liability (included in
‘Other liabilities’) (Note 22) =384,838
P =926,259
P =382,449
P =923,116
P
Net plan assets (included in ‘Other assets -
miscellaneous’) (Note 15) 5,988 5,678 – –
=378,850
P =920,581
P =382,449
P =923,116
P
The Parent Company also provides certain post-employee benefit through a guarantee of a specified
return on contributions in one of its employee investment plans (EIP).
*SGVFS169731*
- 108 -
The changes in the present value obligation and fair value of plan assets are as follows:
Consolidated
2022
Net benefit cost Remeasurements in other comprehensive income
Return on Actuarial
plan asset Actuarial changes
excluding changes arising from
Current Past amount arising from changes in
January 1, Service Service included in experience financial Contributions December 31,
2022 Cost Cost Net interest Subtotal Benefits paid net interest adjustments assumptions Subtotal by employer 2022
Present value of pension obligation = 9,016,762
P = 593,481
P = 312,332
P = 425,991
P P
= 1,331,804 (P
= 1,069,819) =−
P = 153,996
P (P
= 1,170,195) (P
= 1,016,199) =−
P P
= 8,262,548
Fair value of plan assets 8,096,181 − − 383,369 383,369 (1,069,819) (373,885) − − (373,885) 847,852 7,883,698
= 920,581
P = 593,481
P = 312,332
P = 42,622
P = 948,435
P =−
P = 373,885
P = 153,996
P (P
= 1,170,195) (P
= 642,314) (P
= 847,852) = 378,850
P
*Net benefit costs are included in ‘Compensation and fringe benefits’ in the statements of income
Consolidated
2021
Return on plan Actuarial
asset Actuarial changes
January 1, Service Service included in net experience financial Contributions December 31,
2021 Cost Cost Net interest Subtotal Benefits paid interest adjustments assumptions Subtotal by employer 2021
Present value of pension obligation =9,138,303
P =581,774
P =−
P =309,967
P =891,741
P (P
= 635,622) =−
P (P
= 114,426) (P
= 263,234) (P
= 377,660) =−
P =
P9,016,762
Fair value of plan assets 7,931,953 − − 269,847 269,847 (635,622) (220,117) − − (220,117) 750,120 8,096,181
=1,206,350
P =581,774
P =−
P =40,120
P =621,894
P =−
P =220,117
P (P
= 114,426) (P
= 263,234) (P
= 157,543) (P
= 750,120) =920,581
P
*SGVFS169731*
- 109 -
Parent Company
2022
Return on Actuarial
plan asset Actuarial changes
January 1, Service Service included in experience financial Contributions December 31,
2022 Cost Cost Net interest Subtotal Benefits paid net interest adjustments assumptions Subtotal by employer 2022
Present value of pension obligation = 8,959,007
P = 588,010
P = 312,332
P = 424,265
P P
= 1,324,607 (P
= 1,069,819) =−
P = 151,832
P (P
= 1,159,910) (P
= 1,008,078) =−
P P
= 8,205,717
Fair value of plan assets 8,035,891 − − 381,705 381,705 (1,069,819) (372,362) − − (372,362) 847,853 7,823,268
= 923,116
P = 588,010
P = 312,332
P = 42,560
P = 942,902
P =−
P = 372,362
P = 151,832
P (P
= 1,159,910) (P
= 635,716) (P
= 847,853) = 382,449
P
Parent Company
2021
Return on plan Actuarial
asset Actuarial changes
January 1, Service Service included in net experience financial Contributions December 31,
2021 Cost Cost Net interest Subtotal Benefits paid interest adjustments assumptions Subtotal by employer 2021
Present value of pension obligation =9,085,073
P =572,224
P =−
P =307,994
P =880,218
P (P
= 635,622) =−
P (P
= 111,642) (P
= 259,020) (P
= 370,662) =−
P =
P8,959,007
Fair value of plan assets 7,879,861 − − 267,915 267,915 (635,622) (219,871) − − (219,871) 743,608 8,035,891
=1,205,212
P =572,224
P =−
P =40,079
P =612,303
P =−
P =219,871
P (P
= 111,642) (P
= 259,020) (P
= 150,791) (P
= 743,608) =923,116
P
In 2022, the Parent Company amended certain provisions of its defined benefit retirement plan and EIP, resulting in the recognition of past service costs amounting to
=312.3 million.
P
*SGVFS169731*
- 110 -
The latest actuarial valuations for these retirement plans were made as of December 31, 2022. The
following table shows the actuarial assumptions as of December 31, 2022 and 2021 used in
determining the retirement benefit obligation of the Group:
Parent Company
Consolidated Regular Plans EIP
2022 2021 2022 2021 2022 2021
Discount rate 6.92% - 7.15% 3.45% - 4.99% 6.92% 4.75% 6.93% 4.75%
Salary rate increase 6.00% - 10.00% 3.00% - 10.00% 6.00% 6.00% – –
The Group and the Parent Company employ asset-liability matching strategies to maximize
investment returns at the least risk to reduce contribution requirements while maintaining a stable
retirement plan. Retirement plans are invested to ensure that liquid funds are available when benefits
become due, to minimize losses due to investment pre-terminations and maximize opportunities for
higher potential returns at the least risk.
The current plan assets of the Group and the Parent Company are allocated to cover benefit payments
in the order of their proximity to the present time. Expected benefit payments are projected and
classified into short-term or long-term liabilities. Investment instruments that would match the
liabilities are identified. This strategy minimizes the possibility of the asset-liability match being
distorted due to the Group’s and the Parent Company’s failure to contribute in accordance with its
general funding strategy.
The Group and the Parent Company expect to contribute = P730.7 million and =P724.9 million,
respectively, to the defined benefit plans in 2023. The average duration of the retirement liability of
the Group and the Parent Company as of December 31, 2022 is 14 years and 9 years, respectively.
Shown below is the maturity analysis of the undiscounted benefit payments:

2022 2021 2022 2021
Less than one year P
=1,715,711 =1,639,472
P P
=1,715,118 =1,638,962
P
More than one year to five years 5,337,983 5,181,164 5,313,181 5,176,283
More than five years to 10 years 4,452,313 4,356,064 4,399,376 4,310,518
More than 10 years to 15 years 3,946,295 3,625,801 3,867,711 3,530,315
More than 15 years 9,333,106 8,998,036 8,884,949 8,592,546
The fair values of plan assets by each class as at the end of the reporting periods are as follow:

2022 2021 2022 2021
Cash and cash equivalents (Note 33) P
=3,897,238 =3,792,281
P P
=3,887,225 =3,783,563
P
Equity investments
Electricity, gas and water 225,683 284,300 224,668 284,300
activities 210,570 466,747 207,323 466,747
Financial institutions (Note 33) 161,806 177,928 156,169 165,210
Others 192,136 201,956 182,638 194,636
Debt investment
Government securities 1,796,154 1,752,649 1,787,280 1,743,551
Private debt securities 626,677 537,016 618,124 528,473
Investment in UITFs (Note 33) 565,266 805,211 555,186 794,979
Loans and receivables 160,380 63,360 160,380 63,360
Interest and other receivables 50,782 17,232 47,121 13,491
7,886,692 8,098,680 7,826,114 8,038,310
Accrued expenses (2,994) (2,499) (2,846) (2,420)
P
=7,883,698 =8,096,181
P P
=7,823,268 =8,035,890
P
*SGVFS169731*
- 111 -
All equity and debt investments held have quoted prices in active markets. Fair value of investments
in UITFs is based on their published net asset value per share. The remaining plan assets do not have
quoted market prices in an active market, thus, their fair value is determined using the discounted
cash flow methodology, using the Group’s current incremental lending rates for similar types of loans
and receivables.
The fair value of the plan assets as of December 31, 2022 and 2021 for the Group includes
investments in the Parent Company shares of stock with fair value amounting to =
P156.2 million and
=165.2 million, respectively (refer to Note 33.3).
P
The plan assets have diverse investments and do not have any concentration risk.
The sensitivity analysis below has been determined based on reasonably possible changes of each
significant assumption on the defined benefit obligation as of the end of the reporting period,
assuming all other assumptions were held constant:
2022
Possible Increase Possible Increase
fluctuations (decrease) fluctuations (decrease)
Discount rate +1.00% (P
= 452,402) +1.00% (P
= 446,082)
-1.00% 504,175 -1.00% 496,643
Salary increase rate +1.00% 469,231 +1.00% 461,837
-1.00% (432,648) -1.00% (426,285)
Employee turnover rate +10.00% 61,043 +10.00% 60,283
-10.00% (61,043) -10.00% (60,283)
2021
Possible Increase Possible Increase
fluctuations (decrease) fluctuations (decrease)
Discount rate +1.00% (P
=545,838) +1.00% (P
=538,945)
-1.00% 618,425 -1.00% 610,126
Salary increase rate +1.00% 557,244 +1.00% 549,222
-1.00% (504,192) -1.00% (497,358)
Employee turnover rate +10.00% (201,187) +10.00% (200,279)
-10.00% 201,187 -10.00% 200,279
Full actuarial valuations were performed to test the sensitivity of the defined benefit obligation to a
1.00% increment in salary increase rate and a 1.00% decrement in the discount rate. The results also
provide a good estimate of the sensitivity of the defined benefit obligation to a 1.00% decrement in
salary increase rate and a 1.00% increment in the discount rate.
29. Leases
29.1 Group as Lessee
The Group has entered into commercial leases for its branch sites, ATM offsite location and other
equipment. These non-canceleable leases have lease terms of 1 to 25 years. Most of these lease
contracts include escalation clauses, an annual rent increase of 2.00% to 10.00%. The Group ROU
asset is composed of the Parent Company’s branch sites and its subsidiaries offices under lease
arrangements.
*SGVFS169731*
- 112 -
The Group has several lease contracts that include extension and termination options. These options
are negotiated by management to provide flexibility in managing the leased-asset portfolio and align
with the Group’s business needs. Management exercises judgement in determining whether these
extension and termination options are reasonably certain to be exercised.
Rent expense charged against current operations (included in ‘Occupancy and equipment-related
costs’ in the statements of income) amounted to =
P270.2 million, =P251.5 million and =
P580.6 million in
2022, 2021 and 2020, respectively, for the Group, of which P=201.6 million, =P223.2 million and
=532.9 million in 2022, 2021, and 2020, respectively, pertain to the Parent Company. Rent expenses
P
in 2022, 2021 and 2020 pertain to expenses from short-term leases and leases of low-value assets.
As of December 31, 2022 and 2021, the Group has no contingent rent payable.
As of December 31, 2022 and 2021, the carrying amounts of ‘Lease liabilities’ are as follows:

2022 2021 2022 2021
=3,765,391 =1,366,016
P P
=3,698,410 =1,370,206
P
Additions 799,014 3,377,981 789,687 3,298,634
Payments (1,113,225) (1,231,287) (1,068,038) (1,213,912)
Interest expense (Note 19) 171,885 112,591 170,692 107,052
Effect of loss of control over PNB Holdings − 179,095 − 136,430
Effect of discontinued operations (Note 36) − (39,005) − −
Transfers 13,326 − 13,326 −
P
=3,636,391 =3,765,391
P P
=3,604,077 =3,698,410
P
The Parent Company has lease contracts with its affiliates (Note 33).
Future minimum rentals payable under non-cancelable leases follow:

2022 2021 2022 2021
Within one year P
=1,010,202 =1,097,903
P P
=925,509 =1,086,436
P
Beyond one year but not more than five years 3,172,151 2,498,020 3,058,101 2,486,540
More than five years 801,283 1,446,578 705,688 1,446,578
P
=4,983,636 =5,042,501
P P
=4,689,298 =5,019,554
P
29.2 Group as Lessor Under Operating Leases
The Parent Company has entered into commercial property leases on its investment properties. These
non-cancelable leases have lease terms of one to five years. Some leases include escalation clauses
(such as 5.00% per year). In 2022, 2021 and 2020, total rent income (included under ‘Miscellaneous
income’) amounted to =P275.9 million, P
=513.9 million and = P680.3 million, respectively, for the Group
and P
=47.3 million, =
P383.7 million, respectively, for the Parent Company (refer to
Note 27.1).
Future minimum rentals receivable of the Group under non-cancelable operating leases follow:
2022 2021
Within one year P
=42,163 =645,654
P
Beyond one year but not more than five years 460,051 102,795
P
=502,214 =748,449
P
*SGVFS169731*
- 113 -
29.3 Group as Lessor Under Finance Leases
Leases where the Group substantially transfers to the lessee all risks and benefits incidental to
ownership of the leased asset are classified as finance leases and are presented as receivable at an
amount equal to the Group’s net investment in the lease. Finance income is recognized based on the
pattern reflecting a constant periodic rate of return on the Group’s net investment outstanding in
respect of the finance lease (effective interest method). Lease payments relating to the period are
applied against the gross investment in the lease to reduce both the principal and the unearned finance
income.
The future minimum lease receivables under finance leases are disclosed under ‘Loans and
Receivables’ in Note 10.2.
30. Income and Other Taxes
30.1 Philippine Tax Landscape and Regulations
Under Philippine tax laws, the Parent Company and certain subsidiaries are subject to percentage and
other taxes (presented as ‘Taxes and licenses’ in the statements of income) as well as income taxes.
Percentage and other taxes paid consist principally of gross receipts tax and documentary stamp tax.
Income taxes include the corporate income tax, discussed below, and final taxes paid which
represents final withholding tax on gross interest income from government securities and other
deposit substitutes and income from the FCDU transactions. These income taxes, as well as the
deferred tax benefits and provisions, are presented as ‘Provision for (benefit from) income tax’ in the
statements of income.
On March 26, 2021, Republic Act No. 11534, otherwise known as Corporate Recovery and Tax
Incentives for Enterprises (CREATE) Act was signed into law. CREATE reduced the RCIT rate
from 30.00% to 25.00% depending on the criteria set by the law effective July 1, 2020. With the
implementation of CREATE, interest expense allowed as a deductible expense shall be reduced by
20.00% of the interest income subjected to final tax, compared to the 33.00% reduction prior to the
CREATE.
The regulations also provide for MCIT of 2.00% (prior to CREATE) and 1.00% from (July 1, 2020 to
June 30, 2023 before reverting to 2.00%) on modified gross income and allow a NOLCO. The MCIT
and NOLCO may be applied against the Group’s and the Parent Company’s income tax liability and
taxable income, respectively, over a three-year period from the year of inception. For the taxable
years 2020 and 2021, the NOLCO incurred can be carried over as a deduction for the next five (5)
consecutive taxable years, pursuant to Revenue Regulations (RR) No. 25-2020.
Impact of CREATE Law

Applying the provisions of the CREATE Law, the Group and the Parent Company is subjected to
lower regular corporate income tax rate of 25.00% effective July 1, 2020. The following are the
impact of CREATE in the 2021 financial statements of the Group and the Parent Company:
 Based on the provisions of Revenue Regulations (RR) No. 5-2021 dated April 8, 2021 issued by
the BIR, the transitory RCIT and MCIT rates applicable to the Group and the Parent Company for
the taxable year 2020 is 27.50% and 1.50%, respectively. This resulted in reduction in the
current income tax due for the taxable year 2020 amounting to =
P365.1 million and =P361.4 million
*SGVFS169731*
- 114 -
for the Group and the Parent Company, respectively. The reduced amounts were reflected in the
2020 Annual Income Tax Returns filed in 2021. For financial reporting purposes, such
reductions in the 2020 current income taxes were recognized in the 2021 financial statements as
reduction to 2021 income tax expense.
 The deferred tax assets as of December 31, 2021 were also remeasured using the lower RCIT rate
of 25.00%. The net decrease in the deferred tax balances amounting to =P1.5 billion for the Group
and the Parent Company, reduced the provision for deferred tax by =P1.5 billion for the Group and
the Parent Company, and other comprehensive income by P =9.2 million and =P9.4 million for the
Group and the Parent Company.
There were no tax-related contingent liabilities and contingent assets arising from the changes in the
tax rates due to CREATE Act.
Current tax regulations also provide for the ceiling on the amount of EAR expense that can be
claimed as a deduction against taxable income. Under the regulation, EAR expense allowed as a
deductible expense for a service company like the Parent Company and some of its subsidiaries is
limited to the actual EAR paid or incurred but not to exceed 1.00% of net revenue. EAR charged
against current operations (included in ‘Miscellaneous expenses’ in the statements of income)
amounted to
=155.0 million in 2022, =
P P189.1 million in 2021, and =P147.4 million in 2020 for the Group, and
=145.4 million in 2022, =
P P181.3 million in 2021, and =P137.2 million in 2020 for the Parent Company
(refer to Note 27.2).
FCDU offshore income (income from non-residents) is tax-exempt while gross onshore income
(income from residents) is subject to 10.00% income tax. In addition, interest income on deposit
placements with other FCDUs and offshore banking units (OBUs) is taxed at 15.00%. Income
derived by the FCDU from foreign currency-denominated transactions with non-residents, OBUs,
local commercial banks including branches of foreign banks, is tax-exempt while interest income on
foreign currency loans from residents other than OBUs or other depository banks under the expanded
system is subject to 10.00% income tax.
30.2 Provision for (Benefit from) Income Tax

2022 2021 2020 2022 2021 2020
Current
Regular P
=3,463,008 P=1,549,711 P3,215,178
= P
=3,238,970 P=1,316,245 P3,186,427
=
Final 1,807,104 1,411,669 1,459,926 1,784,869 1,372,443 1,388,839
5,270,112 2,961,380 4,675,104 5,023,839 2,688,688 4,575,266
Deferred (338,884) 2,583,814 (6,541,506) (339,814) 2,323,873 (6,520,787)
4,931,228 5,545,194 (1,866,402) 4,684,025 5,012,561 (1,945,521)
Discontinued operations
(Note 36):
Current
Regular − 177,048 68,831 − − −
Final − 15,813 20,519 − − −
− 192,861 89,350 − − −
Deferred − (84,259) (768) − − −
− 108,602 88,582 − − −
P
=4,931,228 =5,653,796 (P
P =1,777,820) P
=4,684,025 =5,012,561 (P
P =1,945,521)
*SGVFS169731*
- 115 -
30.3 Deferred Taxes
The amounts of net deferred tax assets in the statements of financial position follow:

2022 2021 2022 2021
Deferred tax assets P
=6,616,902 =6,405,505
P P
=6,574,190 =6,271,578
P
Deferred tax liabilities (Note 22) 165,721 165,228 – –
P
=6,451,181 =6,240,277
P P
=6,574,190 =6,271,578
P
The components of net deferred tax assets reported in the statements of financial position follow:

2022 2021 2022 2021
Deferred tax assets on:
Allowance for impairment, credit and other
losses P
=9,055,746 =8,467,637
P P
=9,070,709 =8,395,806
P
Accumulated depreciation on investment
properties and appraisal increment 520,544 495,884 520,544 495,884
Accrued expenses 372,660 469,714 372,660 469,714
Deferred revenues 162,342 129,050 162,342 129,050
Retirement liability 50,617 52,434 – –
Unrealized losses on financial assets at
FVTPL and FVOCI – 42,169 – 42,169
Others 8,476 9,812 – –
10,170,385 9,666,700 10,126,255 9,532,623
Deferred tax liabilities on:
Revaluation increment on land and
buildings 1/ 1,536,217 1,536,629 1,536,217 1,536,629
Fair value adjustments on asset foreclosures
and dacion transactions 1,414,221 1,066,381 1,265,883 918,043
Unrealized foreign exchange gains 339,957 340,458 339,957 340,458
Gain on remeasurement of previously held
interest 246,651 246,651 246,651 246,651
Fair value adjustments due to business
combination 161,634 210,574 161,634 210,574
Unrealized gains on financial assets at
FVTPL and FVOCI 1,882 8,836 1,723 8,690
Others 18,642 16,894 – –
3,719,204 3,426,423 3,552,065 3,261,045
P
=6,451,181 =6,240,277
P P
=6,574,190 =6,271,578
P
1/
Balance includes deferred tax liability amounting to =
P 613.7 million acquired from business combination
As of December 31, 2022 and 2021, the Group’s net deferred tax liabilities as disclosed in ‘Other
liabilities’ (refer to Note 22) include deferred tax liabilities on fair value adjustments due to business
combination amounting to = P148.3 million.
Benefit from deferred tax credited directly to OCI pertaining to remeasurement losses on retirement
plan amounted to nil and =
P2.5 million in 2022 and 2021, respectively, for the Group. Provision for
deferred tax charged directly to OCI pertaining to net unrealized gains on financial assets at FVOCI
amounting to =P32.7 million for the Group and the Parent Company in 2022, and = P87.6 million for the
Group and the Parent Company in 2021.
*SGVFS169731*
- 116 -
Unrecognized deferred tax assets

The Parent Company and certain subsidiaries did not recognize deferred tax assets on the following
unused tax credit and losses and temporary differences since they believe that the related tax benefits
will not be realized in the future:

2022 2021 2022 2021
Allowance for impairment and credit losses P
=8,615,344 =13,997,827
P P
=8,615,344 =6,642,377
P
Unamortized past service cost 2,140,071 2,540,326 2,140,071 2,540,326
Derivative liabilities 1,037,348 891,346 1,037,348 891,346
Unrealized losses on financial assets 870,774 – 870,774 –
Unrealized foreign exchange loss 627,501 1,450,079 627,501 1,450,079
Retirement liability 382,449 923,116 382,449 923,116
Lease liability 284,486 21,752 284,162 19,825
NOLCO 140,800 140,800 − –
Unearned interest and discount − 334,355 − 334,355
P
=14,098,773 =20,299,601
P P
=13,957,649 =12,801,424
P
Details of the Group’s NOLCO follow:
Year Incurred Amount Used/Expired Balance Expiry Year

2020 =89,960
P =–
P =89,960
P 2025
2021 50,840 – 50,840 2026
=140,800
P =–
P =140,800
P
Unrecognized deferred tax liabilities

As of December 31, 2022, there was a deferred tax liability of = P840.4 million (P =736.1 million in
2021) for temporary differences of P =3.4 billion (P=2.9 billion in 2021) related to investment in certain
subsidiaries. However, this liability was not recognized because the Parent Company controls
whether the liability will be incurred and it is satisfied that it will not be incurred in the foreseeable
future.
30.4 Statutory Income Tax Reconciliation
The reconciliation between the statutory income tax rate to effective income tax rate follows:
2022 2021 2020 2022 2021 2020
Statutory income tax rate 25.00% 25.00% 30.00% 25.00% 25.00% 30.00%
Tax effects of:
Non-deductible expenses 14.69 4.54 1,060.87 13.73 5.20 559.12
Net unrecognized deferred tax assets (6.04) 6.03 (1,169.49) (6.36) 5.46 (635.63)
Tax-exempt income (2.91) (21.93) (116.17) (2.96) (22.94) (65.28)
Tax-paid income (2.01) (0.63) (85.73) (2.05) (0.66) (47.66)
FCDU loss (income) before tax 1.49 2.61 (59.81) 1.52 2.73 (32.34)
Optional standard deduction (0.36) (0.08) − − – –
CREATE adjustment – deferred tax − 0.01 − − 0.01 −
CREATE adjustment – current tax – (0.95) − − (0.99) −
Effective income tax rate 29.86% 14.60% (340.33%) 28.88% 13.81% (191.79%)
*SGVFS169731*
- 117 -
31. Earnings Per Share
Earnings per share attributable to equity holders of the Parent Company is computed as follows:
2022 2021 2020

a) Net income attributable to equity
holders of the Parent Company =11,532,318
P =31,630,626
P =2,614,653
P
b) Weighted average number of
common shares for basic
earnings per share (Note 25) 1,525,765 1,525,765 1,525,765
c) Basic/Diluted earnings per share
(a/b) =7.56
P =20.73
P =1.71
P
Earnings per share attributable to equity holders of the Parent Company from continuing operations is
computed as follows:
2022 2021 2020

a) Net income attributable to equity
holders of the Parent Company
from continuing operations =11,532,318
P =32,365,991
P =2,403,984
P
b) Weighted average number of
common shares for basic
earnings per share (Note 25) 1,525,765 1,525,765 1,525,765
c) Basic/Diluted earnings per share
(a/b) =7.56
P =21.21
P =1.58
P
In 2022, 2021 and 2020, there are no potential common shares with dilutive effect on the basic
earnings per share.
32. Trust Operations
Securities and other properties held by the Parent Company through its Trust Banking Group (TBG)
in fiduciary or agency capacities for its customers are not included in the accompanying statements of
financial position since these are not assets of the Parent Company. Such assets held in trust were
carried at a value of =
P152.7 billion and P=143.3 billion as of December 31, 2022 and 2021,
respectively. In connection with the trust functions of the Parent Company, government securities
amounting to
=1.6 billion (included under ‘Investment securities at amortized cost’) as of December 31, 2022 and
P
2021 are deposited with the BSP in compliance with trust regulations (refer to Note 9.3).
Trust fee income in 2022, 2021 and 2020 amounting to = P317.8 million, P
=319.4 million and
P314.9 million, respectively, is included under ‘Service fees and commission income’ (refer to Note
=
26.1).
In compliance with existing banking regulations, the Parent Company transferred from surplus to
surplus reserves the amounts of =P24.7 million, =P23.2 million and =
P20.4 million in 2022, 2021 and
2020, respectively, which correspond to 10.00% of the net income realized in the preceding years
from its trust, investment management and other fiduciary business until such related surplus reserve
constitutes 20.00% of its regulatory capital (refer to Note 25.3).
*SGVFS169731*
- 118 -
33. Related Party Transactions
33.1 Summary of Significant Related Party Transactions
Details on significant related party transactions of the Group and the Parent Company follow
(transactions with subsidiaries have been eliminated in the consolidated financial statements).
Transactions reported under subsidiaries represent companies where the Parent Company has control.
Transactions reported under other related parties represent companies which are under common
control.
2022
Amount/ Outstanding
Category Volume Balance Nature, Terms and Conditions
Significant Investors
Deposit liabilities P
=1,323,009 Peso and foreign currency deposits with annual rates
ranging from 0.0% to 4.75%
Net deposits P
=1,318,594 Net deposits during the period
Interest expense 17,621 Interest expense on deposits
Accrued interest payable 2,060 Accrued interest on deposit liabilities
Subsidiaries
Receivables from customers P
=1,105,000 Term loan maturing in January 2023 with nominal interest
Loan releases P
=1,680,302 rate of 8.4%; includes domestic bills purchased; fully
Loan collections 2,057,558 provided with allowance for credit losses
Credit facilities 11,925,849 Includes omnibus line and revocable revolving credit lines,
domestic bills purchase lines and letters of credit/ trust
receipt lines; also includes irrevocable standby letters of
credit; with provision for liability of P
=649.7 million
relating to undrawn loan commitments of PMLFC
Interbank loans receivable 15,147 Foreign currency-denominated interbank term loans with
Availments 80,632 interest rates ranging from 0.01% to 4.50% and maturity
Settlements 94,888 on March 2023 with ACB
Due from other banks 269,904 Foreign currency-denominated demand deposits
Accrued interest receivable 3,187 Interest accrual on receivables from customers and
interbank loans receivable
Accounts receivable 60,474 Peso and USD remittances cover
Deposit liabilities 3,494,470 Peso and foreign currency-denominated deposits with
annual fixed interest rates ranging from 0.0% to 4.85% and
maturities up to 2 years
Net withdrawals 9,193,250 Net withdrawals during the period
Bills payable 13,904 Foreign currency-denominated bills payable with ACB
Availments 81,140 maturing in March 2023 with interest rate of 4.0%
Settlements 97,713
Due to other banks 122,139 Foreign currency-denominated clearing accounts used for
funding and settlement of remittances with GRFC, IIC,
PNB Europe, and ACB
Accrued interest payable 11,206 Accrued interest on deposit liabilities and bills payable
Interest income 102,763 Interest income on receivables from customers, due from
other banks and interbank loans receivable
Interest expense 87,562 Interest expense on deposit liabilities and bills payable
Service fees and commission 171,433 Various services rendered by PNB to its subsidiaries
income covered by a service level agreement; also includes PNB’s
share in service fees
Rental income 145 Payment received for the use or occupation of property
Miscellaneous other income 4,562 Management and other professional fees
*SGVFS169731*
- 119 -
2022
Amount/ Outstanding
Securities transactions
Purchases P
=3,990 Outright purchase of securities
Sales 948,190 Outright sale of securities
Trading gain 19 Gain from sale of investment securities
Other Related Parties

Receivables from customers P
=41,077,025 Partly secured by real estate, vehicles, deposits,
Loan releases P
=12,130,218 government securities, among others; With interest rates
Loan collections 28,633,622 ranging from 2.5% to 11.5% with remaining maturity
terms ranging from 7 days to 9 years and payment terms
ranging from monthly to quarterly payments; with
aggregate allowance for credit losses of P=2.9 billion
Credit facilities 94,657,106 Includes omnibus line and revocable revolving credit lines
and domestic bills purchase lines; also includes irrevocable
standby letters of credit which are partly secured by either
cash or government securities
Sales contract receivable 1,065 Receivable from sale of property paid in installments; with
interest rate of 5.0% and maturing in July 2027
Financial assets at FVOCI 23,218,499 Majority represents the retained 49.00% interest in PNB
Holdings, with unrealized gain of =P325.8 million recorded
in OCI (refer to Note 12.4 for further discussion)
Accrued interest receivable 132,080 Accrued interest on receivables from customers
Security deposit 55,513 Amount given to fulfill the terms of the lease contract
Deferred charges 5,097 Lease payments under the lease contract paid in advance
Right-of-use assets 3,352,161 Lease of office space with terms up to 10 years and the
Accumulated amortization of 1,115,025 corresponding accumulated amortization
right-of-use assets
Deposit liabilities 40,352,466 Peso-denominated and foreign currency-denominated
demand, savings and time deposits with maturity terms
ranging from 30 days to 365 days
Net deposits 4,235,274 Net deposits during the period
Bonds payable 84,840 Foreign currency bonds with interest rate of 4.25% with
maturity terms of five years.
Accrued interest payable 75,597 Accrued interest payable from various deposits
Lease liabilities 2,191,862 Lease of office space with terms ranging from 20 months
to 10 years
Accrued other expenses 319,882 Accruals in relation to promotional expenses
Deferred revenue 44,444 Unamortized portion of income related to the
bancassurance agreement with ABIC
Service fees and commission 3,334 Amortization of fees under the bancassurance agreement
income with ABIC
Interest income 723,194 Interest income on receivables from customers
Interest expense 570,304 Interest expense on deposit liabilities, bonds payable and
lease liabilities
Amortization expense 555,048 Amortization of right-of-use asset relating to leases of
office spaces
Miscellaneous expenses 270,820 Includes CUSA charges for the Parent Company’s share in
common areas on premises owned by PNB Holdings; and
promotional expenses for Mabuhay Miles redemption;
includes management fees paid to Eton Properties
Philippines, Inc.
Purchases 13,089,879 Outright purchase of securities
Sales 6,926,458 Outright sale of securities
Trading loss (23,612) Loss from sale of investment securities
Rental income 8,779 Payment received for the use or occupation of property
*SGVFS169731*
- 120 -
2022
Amount/ Outstanding
Remittance transactions
Fund transfers P
=2,527,729 Peso equivalent of funds transferred
Service fees 3,956 Income share and commission on remittance transactions
Associate
Deposit liabilities P
=468,046 Peso and foreign currency-denominated deposits with
Net withdrawals P
=86,560 annual interest rates ranging from 0% to 0.10%
Accrued interest payable 19 Accrued interest on deposit liabilities
Rental deposits 27 Advance rental and security deposits received for three
months
Deferred revenue 622,192 Unamortized portion of income related to the sale of
APLII
Interest expense 2,066 Interest expense on deposit liabilities
Service fees and commission 73,199 Bancassurance fees earned based on successful referrals
income and income related to the sale of APLII
Key Management Personnel

Loans to officers P
=2,778 Housing loans to senior officers with interest rates ranging
from 3% to 15%; Secured and unimpaired
Accrued interest receivable 9 Accrued interest on loans
Loan collections P
=714 Settlement of loans and interest
Interest income 212 Interest income on housing loans
Deposit liabilities 118,975 Peso and foreign currency-denominated deposits with
interest rates ranging from 0.0% to 4.75%
Net deposits 15,019 Net deposits during the period
Interest expense 3,823 Interest expense on deposits
Accrued interest payable 144 Accrued interest on deposit liabilities
2021
Amount/ Outstanding
Significant Investors
Deposit liabilities =4,415 Peso-denominated savings deposits with annual rates
P
ranging from 0.10% to 0.125%
Net withdrawals =127,586
P Net withdrawals during the period
Interest expense 5 Interest expense on deposits
Subsidiaries
Receivables from customers =1,471,253 Term loan maturing in 2022 with nominal interest rates
P
Loan releases P1,557,106
= ranging from 2.60% to 5.70%; includes domestic bills
Loan collections 1,986,548 purchased; with aggregate allowance for credit losses of
=1.4 billion
P
Credit facilities 13,796,172 Includes omnibus line and revocable revolving credit lines,
domestic bills purchase lines and letters of credit/ trust
receipt lines; also includes irrecovable standy letters of
credit; with provision for liability of P
=125.1 million
relating to undrawn loan commitments of PMLFC
Interbank loans receivable 29,403 Foreign currency-denominated interbank term loans with
Availments 104,698 interest rates ranging from 0.15% to 0.25% and maturity
Settlements 94,537 terms ranging from 116 to 152 days with Allied
Commercial Bank Xiamen
Due from other banks 248,314 Foreign currency-denominated demand and time deposits
with maturities of up to 90 days with annual fixed interest
rates ranging from 0.01% to 4.50% with PNB Europe.
*SGVFS169731*
- 121 -
2021
Amount/ Outstanding
Accrued interest receivable =7,520 Interest accrual on receivables from customers and
P
interbank loans receivable
Accounts receivable 67,772 Advances to finance pension liability, remittance cover and
additional working capital; Non-interest bearing,
unsecured, payable on demand
Deposit liabilities 12,687,720 Peso and foreign currency denominated demand, savings,
and time deposits with annual fixed interest rates ranging
from 0.125% to 1.125% and maturities from 30 to 365
days
Net deposits =22,739
P Net deposits during the period
Bills payable 30,477 Foreign currency-denominated bills payable with ACB;
Availments 106,095 Interest rates range from 0.1% to 0.2% and maturity terms
Settlements 94,445 ranging from 116 to 152 days.
Due to other banks 35,719 Foreign currency-denominated clearing accounts used for
funding and settlement of remittances with GRFC, IIC,
PNB Europe, and ACB
Accrued interest payable 103,473 Accrued interest on deposit liabilities and bills payable
Rental deposit 4,044 Advance rental deposit received for 2 years and 3 months
Interest income 69,370 Interest income on receivables from customers, due from
other banks and interbank loans receivable
Interest expense 18,072 Interest expense on deposit liabilities and bills payable
Miscellaneous other income 2,506 Management and other professional fees
Purchases 1,890,889 Outright purchase of securities
Trading gain 7,149 Gain from sale of investment securities
Other Related Parties

Receivables from customers =57,580,429 Partly secured by real estate and aircraft; With interest
P
Loan releases P45,161,134
= rates ranging from 2.12% to 9.72% with remaining
Loan collections 30,848,903 maturity terms ranging from 7 days to 10 years and
payment terms ranging from monthly to quarterly
payments; with aggregate allowance for credit losses of
=11.1 billion
P
Credit facilities 32,168,949 Includes omnibus line and revocable revolving credit lines
and domestic bills purchase lines; also includes irrevocable
standby letters of credit which are partly secured by either
cash or government securities
Financial assets at FVOCI 22,989,975 Retained 49.00% interest in PNB Holdings, with
unrealized gain of P=117.1 million recorded in OCI (refer to
Note 12.4 for further discussion)
Accrued interest receivable 127,339 Accrued interest on receivables from customers
Right-of-use assets 3,354,358 Lease of office space with terms ranging from 20 months
to 10 years
Deposit liabilities 36,117,192 Peso-denominated and foreign currency-denominated
demand, savings and time deposits with annual interest
rates ranging from0.125% to 1.125% and maturity terms
ranging from 30 days to 365 days
Net deposits 15,060,480 Net deposits during the period
Bonds payable 76,499 Foreign currency bonds with interest rate of 4.25% with
maturity terms of five years.
Accrued interest payable 16,900 Accrued interest payable from various deposits
Lease liabilities 3,180,228 Lease of office space with terms ranging from 20 months
to 10 years
Accrued other expenses 57,369 Accruals in relation to promotional expenses
*SGVFS169731*
- 122 -
2021
Amount/ Outstanding
Deferred revenue =47,778 Unamortized portion of income related to the
P
Bancassurance agreement with ABIC
Interest income =520,535
P Interest income on receivables from customers and on the
unpaid consideration by ABIC for the sale of shares in
PNB Gen
Interest expense 211,108 Interest expense on deposit liabilities, bonds payable and
lease liabilities
Depreciation expense 559,978 Amortization of right-of-use asset relating to leases of
office spaces
Occupancy expenses 163,020 Expenses relating to short-term leases from PNB Holdings
Loss on sale of investment in 134,861 Loss on sale of 65.75% interest of the Parent Company in
a subsidiary PNB Gen to ABIC
income and income related to the sale of PNB Gen
Miscellaneous expenses 9,672 Promotional expenses for Mabuhay Miles redemption;
includes management fees paid to Eton Properties
Philippines, Inc.
Purchases 581,931 Outright purchase of securities
Associate
Deposit liabilities =554,606 Peso-denominated and foreign currency-denominated
P
Net deposits =226,926
P demand, savings and time deposits with annual interest
rates ranging from 0.125% to 2.0% and maturity terms
ranging from 30 days.
Rental deposits 27 Advance rental and security deposits received for three
months
Deferred revenue 695,391 Unamortized portion of income related to the sale of
APLII
Interest expense 412 Interest expense on deposit liabilities
income and income related to the sale of APLII
Key Management Personnel

Loans to officers =3,492 Housing loans to senior officers with interest rates ranging
P
from 3.00% to 15.00%; Secured and unimpaired
Loan collections =669
P Settlement of loans and interest
The related party transactions shall be settled in cash.
Remedies over a loan exposure to a related party

In April 2022, the Parent Company entered into a dacion agreement with a related party over an
investment property with fair value at the time of dacion of =
P1.4 billion in settlement of certain
loans. The remedy to settle the loan also provided for the conversion of the remaining debt to equity
shares of the former borrower.
Transactions relating to the investment in PNB Holdings

As discussed in Note 12.4, the Parent Company executed a proxy in favor of LTG to vote for the
remaining 49.00% held by the Group in PNB Holdings. As a result, the Group accounted for its
retained interest in PNB Holdings as financial asset at FVOCI with no recycling to profit and loss.
The Group and the Parent Company recognized a gain of P =33.5 billion from the loss of control and
remeasurement of the retained interest in PNB Holdings (refer to Note 12.4).
*SGVFS169731*
- 123 -
Financial assets at FVTPL traded through PNB Securities

As of December 31, 2022 and 2021, the Parent Company’s financial assets at FVTPL include equity
securities traded through PNB Securities with a fair value of =
P15.4 million and =
P130.3 million,
respectively. The Parent Company recognized trading gains amounting to = P0.1 million in 2022 and
=7.1 million in 2021 and trading losses of =
P P61.5 million in 2020 from the transactions facilitated by
PNB Securities.
Joint arrangements with Eton Properties Philippines, Inc. (EPPI)

The Parent Company and EPPI signed two joint venture agreements (JVAs) for the development of
two real estate properties of the Parent Company included under ‘Other assets’ (refer to Note 15) and
with carrying values of =P1.2 billion at the time of signing. EPPI and the Group are under common
control. These two projects are among the Parent Company’s strategies in reducing its non-
performing assets. The Parent Company contributed the aforementioned properties into the joint
venture (JV) as approved by BSP. EPPI, on the other hand, contributed its resources and technical
expertise for the completion of the said JV. The Parent Company is prohibited to contribute funds for
the development of the JV. Income from the sale of the properties under the JV will be shared by the
Parent Company and EPPI in accordance with the terms of the JVAs.
In July 2016, the Parent Company executed deeds of conveyance to EPPI on the areas of the land
under the JVA arrangement. The execution of the deeds of conveyance was made to facilitate the
issuance of the condominium certificates of title to the buyers.
33.2 Remuneration of Key Management Personnel and Directors
The compensation of the key management personnel for the Group and Parent Company follows:
2022 2021 2020

Short-term employee benefits P
=517,114 =460,711
P =481,184
P
Post-employment benefits 47,424 50,629 55,308
P
=564,538 =511,340
P =536,492
P
Non-executive directors are entitled to a per diem as follows: =

P50,000 for each BOD meeting
attended and =P25,000 for each BOD committee meeting attended, provided that in no case shall the
total per diem exceed P=0.25 million per month for committee meetings. No other emoluments are
granted to non-executive directors of the Parent Company except for the aforementioned per diem.
There is no profit-sharing arrangement between the Parent Company and its BOD. In 2022 and 2021,
total per diem given to non-executive directors amounted to =P62.6 million and =
P67.5 million,
respectively, recorded in ‘Miscellaneous expenses’ in the statements of income. Directors’
remuneration covers all BOD activities and membership of committees and subsidiary companies.
In 2021 and 2020, key management personnel received 20,099 and 21,474, respectively, Parent
Company shares in relation to the centennial bonus distribution.
33.3 Transactions with Retirement Plans
Management of the retirement funds of the Group and the Parent Company is handled by its TBG.
The fair values and carrying values of the funds of the Group amounted to =
P7.9 billion and
=8.1 billion as of December 31, 2022 and 2021, respectively and the fair values of the funds of the
P
Parent Company amounted to = P7.8 billion and =
P8.0 billion as of December 31, 2022 and 2021,
respectively.
*SGVFS169731*
- 124 -
Relevant information on transactions with the retirement plans follows:

2022 2021 2022 2021
Investment in PNB UITFs P
=558,013 =805,211
P =555,186
P =794,979
P
Deposits with PNB 481,123 1,006,570 480,913 1,005,202
Investment in PNB shares 156,169 165,210 156,169 165,210
Total Fund Assets P
=1,195,305 =1,976,991
P P
=1,192,268 =1,965,391
P
Unrealized gain (loss) on PNB shares (P
= 9,041) (P
=76,030) (P
= 9,041) (P
=76,030)
Unrealized gain (loss) on PNB UITF (35,926) 8,296 (35,926) 8,296
Interest income 18,314 3,607 17,412 3,607
(26,653) (64,127) (27,555) (64,127)
Trust fees (9,152) (9,139) (9,290) (9,139)
Net Fund Losses (P
= 35,805) (P
=73,266) (P
= 36,845) (P
=73,266)
As of December 31, 2022 and 2021, the retirement funds of the Group and the Parent Company
include 8,219,406 PNB shares, respectively, classified as financial assets at FVTPL. There are no
limitations and restrictions over the PNB shares while the corresponding voting rights are exercised
by a trust officer or any of its designated alternate officer of TBG.
In addition to the regular retirement funds, TBG also manages the funds of the Parent Company’s EIP.
34. Provisions, Contingent Liabilities and Other Commitments
In the normal course of business, the Group makes various commitments and incurs certain
contingent liabilities that are not presented in the financial statements including several suits and
claims which remain unsettled. No specific disclosures on such unsettled assets and claims are made
because any such specific disclosures would prejudice the Group’s position with the other parties
with whom it is in dispute. Such exemption from disclosures is allowed under PAS 37, Provisions,
Contingent Liabilities and Contingent Assets. The Group and its legal counsel believe that any losses
arising from these contingencies which are not specifically provided for will not have a material
adverse effect on the financial statements.
There were no significant settlements made in 2022 and 2021.
In the ordinary course of the Group’s operations, certain entities within the Group have pending tax
assessments/claims which are in various stages of protest/appeal with the tax authorities, the amounts
of which cannot be reasonably estimated. Management believes that the bases of said protest/appeal
are legally valid such that the ultimate resolution of these assessments/claims would not have material
effects on the consolidated financial position and results of operations.
*SGVFS169731*
- 125 -
35. Offsetting of Financial Assets and Liabilities
The effects of rights of offset and related arrangements (such as collateral posting requirements) for
financial instruments under an enforceable master netting agreements or similar arrangements to the
Group and the Parent Company’s financial statements are disclosed in the succeeding tables.
Consolidated
2022
Effect of remaining rights of set-off
Net amount (including rights to set off financial
Gross amounts presented in collateral) that do not meet PAS 32
offset in statements of offsetting criteria
Financial assets recognized Gross carrying accordance with financial Fair value of
at end of reporting amounts (before the offsetting position Financial financial Net exposure
period by type offsetting) criteria [a-b] instruments collateral [c-d]
[a] [b] [c] [d] [e]
Derivative assets P
= 61,149,066 P
= 59,787,115 P
= 1,361,951 P
= 73,039 =−
P P
= 1,288,912
Securities held under
agreements to resell
(Note 8) 64,523,863 – 64,523,863 – 64,334,349 189,514
Total = 125,672,929
P P
= 59,787,115 P
= 65,885,814 P
= 73,039 P
= 64,334,349 P
= 1,478,426
2021
at end of reporting period amounts (before the offsetting position Financial financial Net exposure
by type offsetting) criteria [a-b] instruments collateral [c-d]
[a] [b] [c] [d] [e]
Derivative assets =88,929,845
P =87,564,794
P =1,365,051
P =240,111
P =−
P =1,124,940
P
(Note 8) 15,796,673 – 15,796,673 – 16,084,357 –
Total =104,726,518
P =87,564,794
P =17,161,724
P =240,111
P =16,084,357
P =1,124,940
P
2022
Financial liabilities Gross carrying accordance with financial Fair value of
recognized at end of amounts (before the offsetting position Financial financial Net exposure
reporting period by type offsetting) criteria [a-b] instruments collateral [c-d]
[a] [b] [c] [d] [e]
Derivative liabilities = 70,051,569
P = 69,011,793
P = 1,039,776
P P
= 456,745 =–
P P
= 583,031
Securities sold under
agreements to repurchase
(Notes 9 and 19)* 6,595,689 – 6,595,689 – 7,981,190 –
Total = 76,647,258
P = 69,011,793
P = 7,635,465
P = 456,745
P 7,981,190 = 583,031
P
* Included in bills and acceptances payable in the statements of financial position
*SGVFS169731*
- 126 -
2021
[a] [b] [c] [d] [e]
Derivative liabilities =70,313,430
P =69,421,899
P =891,531
P =49,120
P =−
P =842,411
P
(Notes 9 and 19)* 38,494,178 – 38,494,178 – 38,336,528 157,650
Total =108,807,608
P =69,421,899
P =39,385,709
P =49,120
P =38,336,528
P =1,000,061
P
Parent Company
2022
at end of reporting amounts (before the offsetting position Financial financial Net exposure
period by type offsetting) criteria [a-b] instruments collateral [c-d]
[a] [b] [c] [d] [e]
Derivative assets = 61,146,943
P = 59,787,115
P = 1,359,828
P = 73,039
P =–
P = 1,286,789
P
(Notes 8 and 19) 64,523,863 – 64,523,863 – 64,334,349 189,514
Total = 125,670,806
P = 59,787,115
P = 65,883,691
P = 73,039
P P64,334,349
= = 1,476,303
P
2021
at end of reporting period amounts (before the offsetting position Financial financial Net exposure
by type offsetting) criteria [a-b] instruments collateral [c-d]
[a] [b] [c] [d] [e]
Derivative assets =88,926,835
P =87,564,794
P =1,362,041
P =55,079
P =–
P =1,306,962
P
(Notes 8 and 19) 15,796,673 – 15,796,673 – 16,084,357 –
Total =104,723,508
P =87,564,794
P =17,158,714
P =55,079
P =16,084,357
P =1,306,962
P
2022
[a] [b] [c] [d] [e]
Derivative liabilities = 70,051,569
P = 69,011,793
P = 1,039,776
P = 456,745
P =–
P = 583,031
P
(Notes 9 and 19)* 6,595,689 – 6,595,689 – 7,981,190 –
Total = 76,647,258
P = 69,011,793
P = 7,635,465
P = 456,745
P 7,981,190 = 583,031
P
*SGVFS169731*
- 127 -
2021
[a] [b] [c] [d] [e]
Derivative liabilities =70,313,245
P =69,421,899
P =891,346
P =135,912
P =–
P =755,434
P
(Notes 9 and 19)* 38,494,178 – 38,494,178 – 38,336,528 157,650
Total =108,807,423
P =69,421,899
P =39,385,524
P =135,912
P =38,336,528
P =913,084
P
The amounts disclosed in column (d) include those rights to set-off amounts that are only enforceable
and exercisable in the event of default, insolvency or bankruptcy. This includes amounts related to
financial collateral both received and pledged, whether cash or non-cash collateral, excluding the
extent of over-collateralization.
36. Discontinued Operations
36.1 PNB Gen
The results of operation of PNB Gen are presented below:
2021 2020
Interest Income on
Loans and receivables =35
P =202
P
(Note 9) 19,830 81,734
Deposits with banks and others 34 5,087
19,899 87,023
Interest Expense on
Lease liabilities (Note 19) 530 2,698
Net Interest Income 19,369 84,325
Net Service Fees and Commission Income (Note 26) 110 19,718
Insurance premium 202,543 955,640
Insurance benefits and claims 143,605 716,820
Net Insurance Premium 58,938 238,820
Other Income
Foreign exchange gains (losses) - net 1,804 (2,878)
Trading and investment securities gains - net (Note 9) − 9,123
Total Operating Income 80,221 349,108
Operating Expenses
Compensation and fringe benefits 37,040 152,265
Depreciation and amortization (Note 11) 6,592 28,862
Provision for (reversal of) credit losses (Note 16) 1,174 29,781
Occupancy and equipment-related costs 903 1,910
Taxes and licenses 290 4,750
Miscellaneous (Note 27) 8,832 43,539
Total Operating Expenses 54,831 261,107
Income Before Income Tax 25,390 88,001
Provision for Income Tax (Note 30) 4,774 20,418
Net Income from Discontinued Operations =20,616
P =67,583
P
*SGVFS169731*
- 128 -
Net insurance premium consists of:
2021 2020
Net insurance premiums
Gross earned premium P385,904
= P2,385,857
=
Reinsurer’s share of gross earned premiums (183,361) (1,430,217)
202,543 955,640
Less net insurance benefits and claims
Gross insurance contract benefits and claims
paid 207,003 2,241,488
Reinsurer’s share of gross insurance contract
benefits and claims paid (130,493) (1,983,736)
Gross change in insurance contract liabilities 48,017 1,410,172
Reinsurer’s share of change in insurance
contract liabilities 19,078 (951,104)
143,605 716,820
=58,938
P =238,820
P
Net cash flows of PNB Gen follow:
2021 2020
Net cash flows from operating activities (P
=36,288) (P
=27,016)
Net cash flows from investing activities 18,740 (242,063)
Net cash flows from financing activities (1,912) (22,648)
(P
=19,460) (P
=291,727)
36.2 PNB Holdings
The results of operation of PNB Holdings are presented below:
2021 2020
Interest Income on
(Note 9) =−
P =500
P
Deposits with banks and others 1,143 5
1,143 505
Interest Expense on
Lease liabilities (Note 19) 2,998 202
Net Interest Income (Expense) (1,855) 303
Net Service Fees and Commission Expense (45,849) (60)
Other Income
Trading and investment securities gains - net
(Note 9) − 50
Miscellaneous income (Note 27) 486,957 243,860
Total Operating Income 439,253 244,153
(Forward)
*SGVFS169731*
- 129 -
2021 2020
Interest Income on
(Note 9) =−
P =500
P
Deposits with banks and others 1,143 5
1,143 505
Interest Expense on
Lease liabilities (Note 19) 2,998 202
Net Interest Income (Expense) (1,855) 303
Net Service Fees and Commission Expense (45,849) (60)
Operating Expenses
Taxes and licenses 646,070 30,241
Occupancy and equipment-related costs 191,781 380
Provision for credit losses (Note 16) 86,967 −
Depreciation and amortization (Note 11) 42,450 711
Compensation and fringe benefits 976 100
Miscellaneous (Note 27) 123,162 1,471
Total Operating Expenses 1,091,406 32,903
Income (Loss) Before Income Tax (652,153) 211,250
Provision for Income Tax (Note 30) 103,828 68,164
Net Income (Loss) from Discontinued
Operations (P
=755,981) =143,086
P
Net cash flows of PNB Holdings follow:
2021 2020
Net cash flows from operating activities =790,488
P (P
=2,151)
Net cash flows from investing activities − 524,081
Net cash flows from financing activities (567,887) 48
=222,601
P =521,978
P
37. Events After the Reporting Date
In addition to the loans transferred to the Parent Company as discussed in Note 10, on January 31,
2023, the Parent Company and PMLFC entered into a Receivables Purchase Agreement for the
transfer of another tranche of receivables of PMLFC to the Parent Company for a total consideration
of P
=178.7 million.
*SGVFS169731*
- 130 -
38. Notes to Statements of Cash Flows
38.1 Cash Flows from Financing Activities
The changes in liabilities arising from financing activities in 2022 and 2021 follow:
Consolidated
2022
Beginning Net cash Ending
balance flows Others balance
Bills and acceptances payable =52,953,797
P (P
=39,495,624) =1,522,200
P =14,980,373
P
Bonds payable 53,383,421 – 5,055,676 58,439,097
Lease liabilities 3,765,391 (1,113,225) 984,225 3,636,391
=110,102,609
P (P
=40,608,849) =7,562,101
P =77,055,861
P
Consolidated
2021
P (P
=36,426,226) =2,220,573
P =52,953,797
P
Bonds payable 64,056,335 (13,870,000) 3,197,086 53,383,421
Lease liabilities 1,366,016 (1,231,287) 3,630,662 3,765,391
=152,581,801
P (P
=51,527,513) =9,048,321
P =110,102,609
P
Parent Company
2022
P (P
=38,736,538) =1,511,555
P =13,888,035
P
Bonds payable 53,383,421 – 5,055,676 58,439,097
Lease liabilities 3,698,410 (1,068,038) 973,705 3,604,077
=108,194,849
P (P
=39,804,576) =7,540,936
P =75,931,209
P
Parent Company
2021
P (P
=35,919,013) =2,214,671
P =51,113,018
P
Bonds payable 64,056,335 (13,870,000) 3,197,086 53,383,421
Lease liabilities 1,370,206 (1,213,912) 3,542,116 3,698,410
=150,243,901
P (P
=51,002,925) =8,953,873
P =108,194,849
P
Others include the effects of foreign exchange revaluations, additional lease liabilities, amortization
of transaction costs, accretion of interest, and effect of loss of control of a subsidiary.
*SGVFS169731*
- 131 -
38.2 Non-Cash Transactions
The following are non-cash transactions of the Group and the Parent Company in 2022 and 2021
relating to their long-term leases:

2022 2021 2022 2021
Additions to right-of-use assets (Note 11) = 803,905
P =3,352,354
P = 803,905
P =3,350,486
P
Additional lease liabilities (Note 29) 799,014 3,377,981 789,687 3,298,634
On January 13, 2021, the Parent Company subscribed to additional 466,770,000 shares of PNB
Holdings in exchange for certain real estate properties with fair values of =
P46.7 billion. On April 23,
2021, the Parent Company declared 51.00% ownership in PNB Holdings as property dividends to all
stockholders of record as of May 18, 2021 (refer to Note 12.4).
On December 17, 2021, the BOD of PNB Capital approved the declaration of cash dividends
amounting to =
P300.0 million. The Parent Company received such cash dividends from PNB Capital
on June 29, 2022 (refer to Note 12.2).
The Group acquired investment properties through foreclosure, dacion and rescission amounting to
=4.3 billion, =
P P524.7 million, and P
=86.7 million in 2022, 2021 and 2020, respectively. The Parent
Company acquired investment properties acquired through foreclosure and rescission amounted to
=4.3 billion, =
P P334.4 million and =
P78.0 million in 2022, 2021 and 2020, respectively (refer to Note
13). Included in the P
=4.3 billion foreclosures is the dacion in settlement of a certain loan in exchange
for an investment property, and the debt-to-equity conversion of the remaining loan exposures of the
former borrower (refer to Note 33.1).
The Group applied creditable withholding taxes against its income tax payable amounting to
=2.4 billion, =
P P1.6 billion and P
=2.8 billion in 2022, 2021 and 2020, respectively. The Parent Company
applied creditable withholding taxes against its income tax payable amounting to = P2.4 billion,
=1.6 billion and =
P P2.7 billion in 2022, 2021, and 2020, respectively.
39. Approval of the Release of the Financial Statements
The accompanying financial statements of the Group and of the Parent Company were authorized for
issue by the Parent Company’s BOD on March 13, 2023.
40. Report on the Supplementary Information Required Under Revenue Regulations No. 15-2010
On November 25, 2010, the BIR issued RR No. 15-2010, which provides that the notes to the
financial statements shall include information on taxes, duties and license fees paid or accrued during
the taxable year.
*SGVFS169731*
- 132 -
40.1 Taxes Paid or Accrued During the Taxable Year
The Parent Company paid or accrued the following types of taxes for the tax period January to
December 2022 (in absolute amounts):
Taxes and licenses
Amount
Gross receipts tax =2,341,737,766
P
Documentary stamp taxes 3,600,000,000
Real estate tax 39,108,997
Local taxes 173,742,331
Others 278,632,255
=6,433,221,349
P
Withholding taxes
Remitted Outstanding
Withholding taxes on compensation and benefits =972,704,187
P =185,316,904
P
Final income taxes withheld on interest on deposits
and yield on deposit substitutes 621,327,643 94,632,147
Expanded withholding taxes 186,839,828 22,368,470
Withholding taxes on the amount withdrawn from
the decedent’s deposit dccount 32,970,113 1,418,330
VAT withholding taxes 6,047,534 188,832
Other final taxes 99,850,992 8,099,828
=1,919,740,297
P =312,024,511
P
40.2 Tax Cases and Assessments
As of December 31, 2022 and 2021, the Parent Company has no final tax assessment but has
outstanding cases filed in courts for various claims for tax refund. Management is of the opinion that
the ultimate outcome of these cases will not have a material impact on the financial statements of the
Parent Company.
41. Report on the Supplementary Information Required Under BSP Circular No. 1074
41.1 Basic Quantitative Indicators of Financial Performance
The following basic ratios measure the financial performance of the Group and the Parent Company:
2022 2021 2020 2022 2021 2020
Return on average equity (a/b) 7.00% 19.98% 1.69% 7.10% 20.08% 1.94%
a) Net income = 11,583,988
P =31,690,038
P =2,625,488
P = 11,532,318
P =31,283,762
P =2,959,932
P
b) Average total equity 165,564,295 158,602,982 155,479,204 162,468,924 155,768,842 152,657,314
Return on average assets (c/d) 0.99% 2.62% 0.22% 0.99% 2.60% 0.26%
c) Net income P11,583,988
= =31,690,038
P =2,625,488 P
P = 11,532,318 P=31,283,762 = 2,959,932
P
d) Average total assets 1,167,970,869 1,210,959,231 1,186,712,205 1,160,877,451 1,204,106,165 1,144,703,450
Net interest margin on average

earning assets (e/f) 3.61% 3.27% 3.35% 3.62% 3.26% 3.37%
e) Net interest income P37,327,570
= =34,844,827
P =35,820,463 P
P = 36,590,225 =34,003,443
P =34,649,027
P
f) Average interest earning assets 1,033,972,342 1,064,649,949 1,068,225,934 1,010,841,903 1,042,450,632 1,028,955,579
Note: Average balances are the sum of beginning and ending balances of the respective statement of financial position accounts divided by two (2)
*SGVFS169731*
- 133 -
41.2 Description of Capital Instruments Issued
As of December 31, 2022 and 2021, the Parent Company has only one class of capital stock, which
are common shares.
41.3 Significant Credit Exposures as to Industry Sector
An industry sector analysis of the Group’s and the Parent Company’s receivables from customers
before taking into account allowance for credit losses is shown below.

2022 2021 2022 2021
Carrying Carrying Carrying Carrying
Amount % Amount % Amount % Amount %
Financial intermediaries = 123,572,805
P 20.16 =127,322,501
P 20.22 = 124,585,259
P 20.78 =128,833,193
P 20.95
Wholesale and retail 94,635,306 15.44 89,964,601 14.29 89,062,370 14.86 85,521,203 13.91
Electricity, gas and water 77,908,127 12.71 72,603,754 11.53 77,908,992 13.00 72,543,926 11.80
Manufacturing 64,750,821 10.57 57,374,303 9.12 62,394,048 10.41 46,719,362 7.60
communication 41,702,691 6.80 50,593,556 8.04 40,836,136 6.81 57,003,954 9.27
Agriculture, hunting
and forestry 6,846,668 1.12 10,984,068 1.75 6,685,454 1.12 8,472,952 1.38
Public administration and
defense 1,868,664 0.30 8,668,925 1.38 1,868,663 0.31 10,984,068 1.79
Real estate, renting and
business activities 96,701,343 15.78 98,619,763 15.67 93,010,341 15.51 95,143,733 15.47
Construction 30,989,724 5.06 30,123,753 4.79 30,923,083 5.16 29,341,619 4.77
Others 73,881,893 12.06 83,171,564 13.21 72,242,925 12.05 80,345,800 13.07
= 612,858,042
P 100.00 =629,426,788
P 100.00 = 599,517,271
P 100.00 =614,909,810
P 100.00
41.4 Breakdown of Total Loans
41.4.1 As to Security
The information relating to receivables from customers (gross of allowance for credit losses) as to
secured and unsecured and as to collateral follows:

2022 2021 2022 2021
Carrying Carrying Carrying Carrying
Amount % Amount % Amount % Amount %
Secured:
Real estate mortgage P
= 61,579,391 10.05 P=65,400,278 10.40 P= 52,764,741 8.80 P=55,459,239 9.03
Chattel mortgage 12,560,778 2.05 23,572,533 3.75 12,425,497 2.07 22,348,756 3.63
Bank deposit hold-out 3,844,755 0.63 4,375,531 0.70 3,698,931 0.62 4,137,837 0.67
Others 30,856,608 5.03 20,528,460 3.26 28,814,577 4.81 17,144,181 2.79
108,841,532 17.76 113,876,802 18.09 97,703,746 16.30 99,090,013 16.11
Unsecured 504,016,510 82.24 515,549,986 81.91 501,813,525 83.70 515,819,797 83.89
P
= 612,858,042 100.00 =
P629,426,788 100.00 P
= 599,517,271 100.00 =
P614,909,810 100.00
*SGVFS169731*
- 134 -
41.4.2 As to Status
The table below shows the status of the Group and the Parent Company’s loans (gross allowance for
credit losses) as to performing and non-performing loans (NPL) per product line:
Consolidated
2022 2021
Performing NPL Performing NPL
Corporate = 517,026,645
P = 26,814,155
P =497,743,877
P =46,315,906
P
Commercial 15,227,846 3,727,358 10,464,612 3,869,552
Credit cards 11,889,481 2,493,200 10,721,147 2,435,798
Consumer 24,706,149 10,973,208 42,329,698 15,546,198
= 568,850,121
P = 44,007,921
P =561,259,334
P =68,167,454
P
Parent Company
2022 2021
Performing NPL Performing NPL
Corporate = 508,724,119
P = 24,153,812
P =491,798,885
P =45,983,507
P
Commercial 15,475,530 2,027,403 9,398,044 2,006,364
Credit cards 11,889,481 2,493,200 10,721,147 2,435,798
Consumer 21,423,352 13,330,374 37,088,108 15,477,957
= 557,512,482
P = 42,004,789
P =549,006,184
P =65,903,626
P
Loans and receivables are considered NPL, even without any missed contractual payments, when
considered impaired under existing accounting standards, classified as doubtful or loss, in litigation,
and/or there is evidence that full repayment of principal and interest is unlikely without foreclosure of
collateral, if any. All other loans, even if not considered impaired, are considered NPL if any
principal and/or interest are unpaid for more than 90 days from contractual due date, or accrued
interests for more than 90 days have been capitalized, refinanced, or delayed by agreement.
Microfinance and other small loans with similar credit characteristics are considered NPL after
contractual due date or after they have become past due. Restructured loans are considered NPL.
However, if prior to restructuring, the loans were categorized as performing, such classification is
retained.
NPLs remain classified as such until (a) there is sufficient evidence to support that full collection of
principal and interests is probable and payments of interest and/or principal are received for at least
six (6) months; or (b) written-off.
In 2022, the Parent Company adopted BSP Memorandum No. M-2021-056, Regulatory Treatment of
Restructured Loans for Purposes of Measuring Expected Credit Losses, which provides guidance on
the regulatory treatment of loans with terms and conditions that have been modified due to the impact
of the COVID-19 pandemic, especially consumption loans, for purposes of measuring ECL and
classifying the accounts as NPL.
The table below shows the gross and net NPL ratios of the Group and the Parent Company as
reported to the BSP (with certain adjustments) as of December 31, 2022 and 2021:
2022 2021
Gross NPL Net NPL Gross NPL Net NPL
Consolidated 6.34% 2.58% 10.07% 5.27%
Parent Company 6.19% 2.54% 9.97% 5.21%
*SGVFS169731*
- 135 -
41.5 Information on Related Party Loans
In the ordinary course of business, the Parent Company has loans and other transactions with its
subsidiaries and affiliates, and with certain Directors, Officers, Stockholders and Related Interests
(DOSRI). Under the Parent Company’s policy, these loans and other transactions are made
substantially on the same terms as with other individuals and businesses of comparable risks.
The amount of direct credit accommodations to each of the Parent Company’s DOSRI, 70.00% of
which must be secured, should not exceed the amount of their respective deposits and book value of
their respective investments in the Parent Company.
In the aggregate, DOSRI loans generally should not exceed the Parent Company’s equity or 15.00%
of the Parent Company’s total loan portfolio, whichever is lower. As of December 31, 2022 and
2021, the Parent Company is in compliance with such regulations.
The information relating to the DOSRI loans of the Group and Parent Company follows:
2022 2021
Related party Related party
loans (inclusive loans (inclusive
DOSRI loans of DOSRI loans) DOSRI loans of DOSRI loans)
Total outstanding loans = 39,017
P = 42,182,025
P =4,606,070
P =59,914,803
P
Percent of DOSRI/related party loans to total loan
portfolio 0.01% 6.22% 0.70% 9.08%
Percent of unsecured DOSRI/related party loans to
total DOSRI/related party loans 1.56% 86.52% 0.03% 64.94%
Percent of past due DOSRI/related party loans to total
DOSRI/related party loans 3.52% 2.62% – 10.17%
Percent of non-performing DOSRI/related party loans
to total DOSRI/related party loans 3.52% 2.62% – 44.00%
In accordance with existing BSP regulations, the reported DOSRI performing loans exclude loans
extended to certain borrowers before these borrowers became DOSRI.
Under BSP regulations, total outstanding exposures to each of the Parent Company’s subsidiaries and
affiliates shall not exceed 10.00% of the Group’s net worth, the unsecured portion of which shall not
exceed 5.00% of such net worth. Further, the total outstanding exposures to subsidiaries and affiliates
shall not exceed 20.00% of the net worth of the Parent Company.
41.6 Aggregate Amount of Secured Liabilities and Assets Pledged as Security
As of December 31, 2022 and 2021, ‘Bills payable’ amounting to = P6.6 billion and =
P38.5 billion in
Note 19, respectively, are secured by a pledge of certain ‘Financial assets at FVOCI’ amounting to
=2.5 billion and =
P P32.8 billion respectively, and ‘Investment securities at amortized cost’ amounting to
=5.5 billion and =
P P5.3 billion, respectively.
*SGVFS169731*
- 136 -
41.7 Contingencies and Commitments Arising from Off-Balance Sheet Items
The following is a summary of various commitments, contingent assets and contingent liabilities at
their equivalent peso contractual amounts as reported to BSP:

2022 2021 2022 2021
Trust department accounts P
=152,746,479 =143,335,871
P P
=152,746,479 =143,335,871
P
Derivative forwards 151,543,370 158,060,387 147,448,673 153,621,017
Standby letters of credit 43,922,556 37,361,325 43,702,875 37,198,406
Unutilized credit card lines 41,981,905 41,690,462 41,981,905 41,690,462
Deficiency claims receivable 28,065,650 22,862,480 28,065,650 22,862,480
Derivative spots 7,474,525 19,204,658 7,474,525 19,204,658
Inward bills for collection 1,116,689 2,591,812 1,116,689 2,589,780
Outward bills for collection 355,358 182,354 300,396 78,770
Unused commercial letters of credit 204,707 219,246 204,707 219,246
Items held as collateral 165,282 248,046 165,270 248,025
Confirmed export letters of credit 94,784 86,188 94,784 86,188
Shipping guarantees issued 22,800 20,822 20,655 18,861
Other contingent accounts 76,663 14,440 7,592 7,185
*SGVFS169731*

Philippine National Bank - Audited Financial Statements - 31dec2022 - PSE

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Philippine National Bank - Audited Financial Statements - 31dec2022 - PSE

Uploaded by

Copyright:

Available Formats

Office of the SVP and Acting Financial Officer

Trunk Lines: 8526-3131 to 70/8891-6040 to 70

March 15, 2023

MS. ALEXANDRA D. TOM WONG

ATTY. MARIE ROSE M. MAGALLEN-LIRIO

Very truly yours,

AIDELL AMOR R. GREGORIO

CURRENT REPORT UNDER SECTION 17

1. March 15, 2023

2. SEC Identification Number ASO96-005555 3. BIR Tax Identification No. 000-188-209-000

4. PHILIPPINE NATIONAL BANK

5. PHILIPPINES 6. (SEC Use Only)

Province, country or other jurisdiction of Industry Classification Code:

Title of Each Class Number of Shares of Common Stock

Common Shares 1,525,764,850

11. Indicate the item numbers reported herein: Item 9

SEC Registration Number

PRINCIPAL OFFICE( No. / Street / Barangay / City / Town / Province )

CONTACT PERSON INFORMATION

CONTACT PERSON’s ADDRESS

INDEPENDENT AUDITOR’S REPORT

The Stockholders and the Board of Directors

Report on the Consolidated and Parent Company Financial Statements

Basis for Opinion

Key Audit Matters

Adequacy of Allowance for Credit Losses on Loans and Receivables

We reviewed the completeness of the disclosures made in the financial statements.

Impairment Testing of Goodwill

Recognition of Deferred Tax Assets

SYCIP GORRES VELAYO & CO.

March 13, 2023

Consolidated Parent Company

LIABILITIES AND EQUITY

See accompanying Notes to Financial Statements.

Consolidated Parent Company

See accompanying Notes to Financial Statements.

Consolidated Parent Company

NET INCOME = 11,583,988

OTHER COMPREHENSIVE INCOME (LOSS)

OTHER COMPREHENSIVE LOSS,

TOTAL COMPREHENSIVE INCOME = 8,696,023

See accompanying Notes to Financial Statements.

Balance at January 1, 2021 =61,030,594

Balance at January 1, 2020 =61,030,594

Balance at January 1, 2021 =61,030,594

Balance at January 1, 2020 =61,030,594

See accompanying Notes to Financial Statements.

Consolidated Parent Company

CASH FLOWS FROM OPERATING

CASH FLOWS FROM INVESTING ACTIVITIES

Consolidated Parent Company

CASH FLOWS FROM FINANCING

NET INCREASE (DECREASE) IN CASH AND

CASH AND CASH EQUIVALENTS AT

CASH AND CASH EQUIVALENTS AT

OPERATIONAL CASH FLOWS FROM

See accompanying Notes to Financial Statements.

2. Summary of Significant Accounting Policies

2.1 Basis of Preparation of the Financial Statements

2.2 Statement of Compliance

2.3 Presentation of the Financial Statements

2.4 Basis of Consolidation

2.5 Foreign Currency Translation